The AusIMM - OZ Minerals

DECEMBER 2016The AusIMM

The AusIM

M B

ULLETIN

DEC

EMB

ER 20

16

Social licence to operatePartnering beyond stakeholders

GoldAvoiding the sins of the past

Resource EfficiencyRethinking mine waste

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ContentsDecember 2016

Regulars

4 President’s Editorial

6 CEO’s Editorial

AusIMM News8 AusIMM News

12 The gender pay gap and the mining industry

14 AusIMM Professional Development

16 Country snapshot: Peru

90 Heritage: Professional idealism

94 Book Review

96 AusIMM Contacts

Connect:Facebook: www.facebook.com/ausimm

LinkedIn: search ‘AusIMM’ in groups

Twitter: www.twitter.com/theausimm

YouTube: www.youtube.com/theausimm

Bulletin online: www.ausimmbulletin.com

Lead Articles

18 An introduction to mentoringDr Ali Burston shows how fostering a mentoring relationship can have positive career benefits for both mentors and mentees.

22 Navigating volatility – do you change your business or the way your business works?

EY’s Andrew Carrick says it is important for mining companies to focus on six areas that will lead to more effective cash management.

26 Transforming Australia’s economic landscape through supplier diversity

Supply Nation CEO Laura Berry discusses connecting Australia with Indigenous-owned businesses.

18

Editor:

Richard Startari

[email protected]

Editorial Coordinator:

Dominic Stevenson

[email protected]

Circulation:

The AuslMM Bulletin is an audited publication.

The Circulation Audit Board (CAB) audited average net distribution figure is 10,514.

ISSN 1034-6775

Published by:

Citrus Media

PO Box 20154

World Square NSW 2002

Email: [email protected]

Advertising:

Telephone: +61 2 9186 9186

Email: [email protected]

THE AUSTRALASIAN INSTITUTE OF MINING AND METALLURGY

Founded 1893 Incorporated by Royal Charter 1955

See page 96 for AusIMM contact details.

The AusIMM and the editor are not responsible for statements made or opinions advanced by authors in The AusIMM Bulletin and accept no liability (including liability in negligence) for and give no undertaking concerning the accuracy, completeness or fitness for the purpose of the information provided. The AusIMM takes no responsibility for any loss or damage that the use of this publication may cause to be incurred by reliance on information herein; users should carefully evaluate accuracy, currency, completeness and relevance of information and seek professional advice relevant to their particular circumstances.

Reducing Energy, Water and Waste30 The contribution of mining to the

emerging circular economy

34 Can renewable energy lower your cost of production?

38 Waste not, want not – rethinking the tailings and mine waste issue

Gold44 Can the gold industry avoid the

sins of the past?

48 The Australian and New Zealand gold industry – going all in

52 Costerfield – a narrow-vein case study

Working with Communities56 Challenges in obtaining a social

licence to mine

60 Local level agreement making

Mine Site and Project Management66 Building and maintaining

effective project teams

70 Corporate memory

72 Organic management structure – its advantages in a mining consultancy

Industry Focus78 Trigger action response plans for

diesel exhaust exposures

82 Challenging the norm - innovate to differentiate

86 Detonators – best-for-project practices in drill and blast

Features

DECEMBER 2016

The AusIMMThe AusIM

M B

ULLETIN

DEC

EMB

ER 20

16

Social licence to operatePartnering beyond stakeholders

GoldAvoiding the sins of the past

Resource EfficiencyRethinking mine waste

DECEMBER 2016 BULLETIN MAGAZINE 3

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90

34

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82

Front cover: Andrew Cole and Chris Larkin.

As I come to the end of my two-year term as President of one of the world’s greatest peak bodies for minerals professionals, I would like to reflect on what the AusIMM has

achieved over this time and where we are headed. The collective highlight of my time as President has without doubt been to meet and speak with our members. As both President and an ordinary member of our Institute, the AusIMM Branches and Societies are at the heart of why I belong to the AusIMM and are one of our greatest strengths. I found it somewhat serendipitous that the first and – almost last – Branch I visited during my Presidency was North Queensland Branch, the Branch I was involved with when I first joined the AusIMM 26 years ago.

There are some key matters I would like to discuss that are of the utmost importance to me and to the membership of the AusIMM.

Governance

By-Laws and Royal CharterThe Royal Charter and By-Laws review has been moving steadily ahead over the last two years, with three opportunities for members to comment and contribute this year in addition to the opportunities at Congress 2015 and 2016. The final draft of the AusIMM’s new constitution will be circulated to members prior to it being voted on at 2017 Congress in Newcastle.

Once approved by members, AusIMM will then present the ratified constitution to the Governors General of Australia and New Zealand for approval. This will be a momentous occasion and the culmination of several years’ work by a committee of three of our dedicated Past Presidents, chaired by Peter Lilly and comprising Alice Clark and Peter McCarthy.

Professional StandardsProfessional development is at the heart of the AusIMM. It gives the communities in which we work and live the confidence that our skills are at their best. All members are obliged to undertake professional development under the AusIMM Code of Ethics, which is agreed upon each year by every member when they renew their membership.

Other professional disciplines, such as medical practitioners, veterinary scientists or accountants, must be registered to practice and prove they undertake relevant continuing professional development to maintain their skills. There are a growing number of jurisdictions around the world where professional registration has at its core mandatory and demonstrable professional development and competence for mining professionals.

In 2016, the AusIMM made the difficult decision to partially suspend the Chartered Professional (CP) Program, by restricting the intake of new applications, so that resources that were being directed to maintain the current system could be used to review and reform it.

My vision for the AusIMM’s CP Program is that it is robust, respected and meets or exceeds the requirements of any mining jurisdiction where registered or certified mining accreditation is required. I believe the world’s mining industry is heading down a path where registration and/or certification of every professional will be required for them to practice. I do not see this as something any of us should be concerned about – quite the contrary. ‘Being the best minerals professional we can be’, is not just something we should say about ourselves, but something that other minerals professionals say about members of the AusIMM.

Financial positionThe last two years have seen a rapid change in the financial position of the AusIMM. The downturn in the minerals sector has now been clearly reflected in our balance sheet, and the cash flow of the AusIMM has been impacted as a result. I announced at Congress that the consolidated result of the AusIMM for the full year 2015 was a deficit of $706 567. This result includes deficits of $454 989 (Services) and $251 668 (Branches etc) compared to a Services budget deficit of $298 178. In addition an unrealised loss on investments of $217 886 was recorded.

The collective highlight of my time as President has without doubt been to meet and speak with our members

Rex Berthelsen FAusIMM(CP), President, AusIMM

Reflections on the past two years

President’s Editorial

4 BULLETIN MAGAZINE DECEMBER 2016

In October 2015, the Board approved the 2016 Services budget deficit of $731 247. This was to ensure services to members could be maintained and where possible expanded. It was done to continue supporting members who had lost their employment or whose employment was significantly reduced. It was also done with a projected return to surplus in 2017 resulting from the forecast rebound in the minerals industry. However, member numbers plateaued in 2015 and declined in 2016. Income from conferences and publications is also decreasing, with many conferences not achieving their targets and in more cases than desired not breaking even.

The Board has always maintained that services provided by the AusIMM to members should not be significantly reduced, as we understand that members need to see and receive value from their membership fees.

While this paints a somewhat concerning picture, the Board has made some difficult and critical decisions to bring the AusIMM back to surplus in 2017. We have now budgeted for reduced expenditure, which is in line with expected reductions in membership and revenue from conferences, and this has resulted in a modest budget surplus in 2017 of $13 151. The Board also believes that service levels to members will not be materially impacted by the changes we have made.

Our kindred societiesThe AusIMM has a growing list of partners and friends in professional groups around the world. I was pleased and honoured to add one more kindred society to that list when I

signed a Memorandum of Understanding with the Geological Society of London in 2015. This was a process started by our Immediate Past President Geoff Sharrock during his term as President.

I am also pleased to have been able to meet with and advance the relationship between the AusIMM and our partners within the Global Minerals Professional Alliance (GMPA) including the CIM (Canada), the SME (USA) and the SAIMM (Southern Africa). This year Peru has joined the GMPA, furthering the depth of this growing alliance.

ThanksBefore I sign off, I would like to sincerely thank my fellow Board members and Acting CEO Miriam Way, who have made my time as President memorable, productive and rewarding. My employer MMG has been exceptionally supportive and gracious in allowing me to take up the role of President. That support has been unwavering and their support of the AusIMM has been exceptional. And lastly, but not at all least, I would like to extend my sincere thanks to Michael Catchpole, our former CEO, who has led the AusIMM for, I think, nine of his best years.

Furthermore, and in particular, I would like to thank and acknowledge the efforts of our Immediate Past President Geoff Sharrock, who will retire from the Board at the end of 2016. His wise council and steadfast belief in our Institute, is truly admirable. And now it is time to hand over the reins to Colin Moorhead, who, with a great depth of corporate experience and leadership strength, is sure to guide the AusIMM on a steady and successful path into the future.


President’s Editorial

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SETTING THE STANDARD IN

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Our advanced vein modelling tools provide an intuitive, dynamic way of modelling thin units such as dykes and lenses.

This enables pain free modelling of complex vein systems with folds, pinchouts and bifurcations giving you more time to focus on what matters.

As has been the case in recent years, 2016 was a challenging year for the AusIMM and the mining industry as a whole. However, despite the prevailing industry

conditions, the Institute maintained its support of members and continued to offer a comprehensive range of professional development services. The AusIMM recognises the importance of the role that it plays in supporting members throughout their careers, both in the good times and during the down times. I am very proud to have been given the opportunity to lead an organisation with members that have remained so supportive of the Institute through one of the most difficult periods in the history of the Australian mining industry.

The AusIMM ran a successful conference program in 2016, hosting or co-hosting eight conferences and holding a number of smaller events. One of the highlights of this year’s conference program was the Seventh International Conference and Exhibition on Mass Mining (MassMin 2016) held in Sydney in May. MassMin 2016 welcomed more than 500 delegates from over 20 countries and was widely praised by all attendees.

Another significant highlight in the 2016 events program was International Mine Management 2016, which was held in Brisbane in August. With presenters such as Sandeep Biswas, Vanessa Guthrie and Andrew Cole, International Mine Management 2016 featured the most comprehensive and high-profile keynote speaker program (14 in total) ever assembled for an AusIMM conference. The AusIMM recorded these speakers’ presentations and has made them available for download so that all members can hear the insights of some of the industry’s most high-profile leaders. The process of recording keynote and speaker presentations and making them available for download is a new initiative

by the AusIMM that will be continued in 2017.In October, I travelled to Rio de Janeiro as part of

the joint CSIRO and AusIMM bid team for the 26th World Mining Congress. After months of hard work by all involved, I am pleased to announce that our bid, which was led by Dr Hua Guo FAusIMM, Energy Research Director for Coal Mining at CSIRO, was successful. As a result, CSIRO and the AusIMM will jointly host the World Mining Congress in Brisbane in 2021. The World Mining Congress is one of the world’s leading mining events, and this will be the first time that it has been held in Australia. Being entrusted with the responsibility of hosting such a major international event is a fantastic endorsement of Australia’s leadership within the global mining community.

The 2016 AusIMM Professional Employment Survey showed that AusIMM members are optimistic about the future prospects of the mining industry. However, it also showed that unemployment continues to affect a significant proportion of our members. The Institute maintained its support of these members in 2016 through the Member Assistance Program (MAP). The Institute will continue to offer MAP in 2017 to members who are having difficulties finding work in the industry and are experiencing financial hardship.

Finally, I would like to sincerely thank Rex Berthelsen for the dedication and commitment that he has shown as AusIMM President over the last two years. During his tenure as President, Rex has overseen significant and important changes to the Institute’s governance and has guided the AusIMM through transformational change that will help ensure our long-term sustainability. He has been a regular presence at AusIMM events and Communities of Interest meetings, and the interests of members have always been at the forefront of the initiatives that he has championed. He has provided strong leadership and support to the Board and both myself and my predecessor, Michael Catchpole. We are truly honoured to have had the opportunity to work closely with him as our President.

On behalf of everyone at the AusIMM, we wish you and your families a safe and happy Christmas and New Year. We look forward to welcoming our new President Colin Moorhead and working with you all in 2017.

Miriam Way MAusIMM, Acting CEO, AusIMM

Members’ loyalty is our greatest strength

Despite the prevailing industry conditions, the Institute maintained its support of members and continued to offer a comprehensive range of professional development services

CEO’s Editorial



www.mininggeology.ausimm.com.au

Tenth International MiningGeology Conference 2017

Setting new standards20–22 September 2017, Hobart, Tasmania

Save the DateSPONSORSHIP & EXHIBITION OPPORTUNITIESShowcase your business at the conference and register yourinterest in sponsorship and exhibition today! A selection ofhigh-profile sponsorship opportunities are available to maximiseyour company’s exposure, as well as a trade exhibition, whichwill provide an excellent opportunity for your company to displayproducts, services and to network with conference participants.Should you wish to discuss opportunities, or if you have anyenquiries, please feel free to contact event management.

EVENT MANAGEMENT: The AusIMMFor further information please contact:

Suzie Chan, Senior Coordinator, Events, The AusIMMTelephone: +61 3 9658 6126 | Facsimile: +61 3 9662 3662Email: [email protected]

The Tenth International Mining Geology Conference will be held in Hobart, Australia,20–22 September 2017. The International Mining Geology Conference series, jointlyconvened by the Australian Institute of Geoscientists (AIG) and the Australasian Institute ofMining and Metallurgy (AusIMM), has developed into the premier event in the world ofMining Geology. The role of Mining Geologists continues to evolve and increase inimportance. Mining Geologists are now involved in many business-critical steps in thevalue chain, from resource evaluation and feasibility through mine production managementand geometallurgy to marketing. The complexity of mining geology also continues to evolveand increase in response to corporate expectation and technological development, andthere is a greater need for our work to be standardised. The theme of the Tenth InternationalMining Geology Conference is “Setting New Standards” where we plan to focus onopportunities and benefits of formal work process standards, and also on improving thequality/standard of current approaches to mining geology.

LIFE CYCLE ASSESSMENT FOR THE MINING AND MINERALS INDUSTRY- HSC CHEMISTRY

Perth 6-17 February 2017Melbourne 13-24 February 2017 HSC process models gives a solid basis for calculating environmental footprints. These courses will cover LCA, HSC basics, equilibrium, pyro, hydro and mineral processing topics.

TRAINING COURSES

Please book your seat by 30 December 2016:

[email protected]/webshop

For the latest AusIMM news and activities visit www.ausimmbulletin.com

AusIMM News

13th AusIMM Mill Operators’ Conference 2016The 13th AusIMM Mill Operators’ Conference 2016 was held in Perth from 10-12 October, and had a theme of ‘Measure, Manage, Improve’. The conference featured keynote and technical

presentations of all aspects of mill operation and management. For a full report from the conference from Andrew Newell MAusIMM, visit www.ausimmbulletin.com/millops2016.

Tim Napier-Munn.

Frane Van Zyl.

L-R: Rob Dunne, William Staunton, Robert Sinclair, Gavin Tindall, John Robinson, Conor McCamley.


AusIMM New Leaders’ Conference 2016The AusIMM New Leaders’ Conference 2016 was held in Brisbane from 19-20 September. Attendees heard presentations from current industry leaders on a range of disciplines including geology, mining, metallurgy and environmental management. As well as presentations, the two days included workshop sessions designed especially for young graduates in the minerals industry.

Thank you to Eric Garner AM HonFAusIMM(CP)In December 2016, Eric Garner AM HonFAusIMM(CP) stepped down from his long-serving role on the AusIMM Complaints Committee – including ten years as Chair of the Committee. Eric has provided outstanding service to the Institute, in which he served in numerous leadership positions, provided invaluable advice on internal governance matters and helped to ensure the integrity of the AusIMM and its members.

Eric joined the AusIMM in 1984, and his first role as an office bearer was when he was appointed to the former AusIMM Council as a representative for overseas members. In 2005, he became the inaugural Chairman of the AusIMM Complaints Committee, a role that he held until he stepped down from the position at the end of last year. In addition to this important role, Eric served on the AusIMM Membership Applications Committee for 15 years, ten of which were as Chair. Over this period, Eric also made significant and important contributions to the 2004 and 2007 amendments to the AusIMM By-Laws and to the 2007 Royal Charter amendment proposal.

In addition to his numerous positions on AusIMM committees and taskforces, Eric was a regular and valued contributor to AusIMM Congress, and he provided valuable advice and guidance to successive Presidents and AusIMM executives, particularly on matters of internal governance.

In 1994, Eric’s long and distinguished career in the Australian minerals industry was recognised when he was made a Member of the Order of Australia for his service to the resource development industry and international trade. Eric’s exceptional contribution to the AusIMM was recognised in 2004 with the Beryl Jacka award, which is awarded for extraordinary and sustained service to the Institute. In 2009, Eric’s contribution to the AusIMM was further recognised when he was made an Honorary Fellow of the Institute.

The AusIMM thanks Eric for his many years of service to the Institute and looks forward to his continued contributions at future AusIMM events.

Eric Garner and his wife, Noelle.

L-R: Darryl Han, Jamie Tonge, Xavier Bouton, Matt Cornelius.

L-R: Mathew Butler, David Looyschelder, Paul Tsihlis.

L-R: Michaela Padayachee, Sudipa Bhattacharyya, Jessica McGregor.

L-R: Billy Buka, Hendrik Enslin, Kailan Horn, Enrik Mundt, Jonathon Flynn, Trent Naylor, Rosemary Seth, Shahana Neminathan.


News

L-R: Dr Hua Guo, CSIRO Energy Research Director for Coal Mining and Chair of the WMC National Organising Committee of Australia; Professor Józef Dubiński, Chair of WMC International Organising Committee; Miriam Way, AusIMM Acting Chief Executive; and Dr Jacek Skiba, Secretary General of WMC International Organising Committee.

CSIRO and AusIMM to host 26th World Mining CongressCSIRO and AusIMM have been successful in their bid to host the 26th World Mining Congress (WMC) in Brisbane during 2021. The WMC takes place every 3 years, and is a major international summit that aims to promote and support the cooperation for the national and international development of mineral areas and resources.

This will be the first time that Australia has hosted the WMC, and represents a unique opportunity to showcase Australia’s position as a leading nation in the global minerals industry. The Congress is expected to welcome 2000 delegates from 40 member countries responsible for 80 per cent of the world’s mineral production.

The AusIMM Adelaide Branch 42nd Essington Lewis Memorial LectureThe rich history of respected and celebrated Essington Lewis Memorial Lecturers continued on 28 October with Dr Megan Clark AC presenting to an audience of 70 AusIMM members and guests at the University of South Australia.

Every year for the past 42 years, the Adelaide Branch of the AusIMM has organised this prestigious lecture to commemorate the memory and achievements of Essington Lewis, former Chairman of the BHP Board. In honour of Essington Lewis’s South Australian roots, the AusIMM Adelaide Branch commemorates his life’s work by inviting influential speakers to present lectures with perspectives on matters of mining, industry, social, national and international significance.

In a speech titled ‘Science and the mining and resources industry – partners and helpers in building an exciting, equal and sustainable world’ Dr Clark said global energy sectors were poised for a revolution driven by the strong strategic forces of supply/demand, technological development, social expectations and geopolitics.

Megan provided her professional and personal insights regarding what those in the science and engineering disciplines should reflect and act on amidst an ever-changing world of social expectations, technological advances, energy demands and increased environmental awareness, where markets are increasingly less predictable, and where social privilege to operate is not only harder to gain but is easily lost.

The lecture prompted some insightful audience questions regarding education, energy alternatives and infrastructure which were ably answered by Megan. Dr Kathy Ehrig, Principal Geometallurgist with BHP Billiton, delivered a most fitting and personal vote of thanks on behalf of the AusIMM and all those gathered and presented Megan with a unique trophy locally sourced from the Whyalla steelworks, yet another operation that Essington was instrumental in founding.

L-R: AusIMM Director Janine Herzig, Dr Megan Clark, Dr Kathy Ehrig.

57%

7%


News

By the numbers: The Australian mining industry

222,300 PEOPLE

AS OF SEPTEMBER 2016, THE AUSTRALIAN MINING INDUSTRY EMPLOYED

IN THE 2014/15 FINANCIAL YEAR THE MINING INDUSTRY CONTRIBUTED APPROXIMATELY

OF AUSTRALIA’S RESOURCES EXPORTS WENT TO CHINA

IN THE 2015/16 FINANCIAL YEAR,

TO AUSTRALIA’S GDP

Henry Muller FAusIMM wins global technology and innovation awardCongratulations to Henry Muller, who was awarded the inaugural BHP Billiton Technology and Innovation Award on 19 September.

BHP Billiton awarded Henry for the work he carried out in the 1980s to ensure that Olympic Dam was commercially viable.

Henry joined the AusIMM as a student in 1954. He currently has 63 years of membership, receiving his 60-year certificate at the Adelaide Branch Annual Dinner in 2013.

He received the prestigious AusIMM President’s Award in 1999, ‘for his contribution and leadership in mineral processing including the development and implementation of the process flowsheet at Olympic Dam and his ongoing commitment to the development of younger metallurgists.’

He is well known among South Australian members as a very modest gentleman. Now retired, Henry and his wife Marina remain very active, attending most Branch technical meetings, distinguished lectures, annual dinners, field trips and Auxiliary functions.

2016 Education Endowment Fund field tripEarlier this year, the 2016 Education Endowment Fund (EEF) Scholarship recipients were given the opportunity to undertake a field trip that spanned the Illawarra and Lachlan Regions of NSW over six days in early July. Ten attendees came from around Australia to join the tour, which was led by AusIMM Board member Dale Sims with assistance from Illawarra Branch members Ray Tolhurst and Kevin Marston.

Over the course of the field trip, the scholars were exposed to a diverse range of operations, practices and concepts that spanned across the mining, metallurgy and mineral sectors including site visits to the following operations: ■■ South 32’s Appin East and

West underground coal mines

and West Cliff coal wash plant■■ BlueScope’s Illawarra steelworks ■■ MM Kembla’s copper tubing plant■■ Newcrest’s Cadia Valley

operations■■ Alkane Resource’s Tomingley

Gold operation and the Dubbo Zirconia Project■■ Glencore’s Ulan West and Number

3 underground coal mines■■ University of New South Wales’

Virtual Reality Laboratory within the School of Mining Engineering.

From the extensive site visits and informative discussions with both staff and field trip co-ordinators, the attendees were asked to provide their insight into what each company/site was doing well, as well as the challenges faced by each operation and how they were addressing them. BHP Billiton CEO Andrew Mackenzie, Henry Muller,

Marina Muller and BHP Billiton CTO Diane Jurgens.


News

As part of the AusIMM Professional Employment Survey conducted in June 2016, the AusIMM asked

questions about the remuneration that survey respondents receive. These questions are included every two years in the Professional Employment Survey and provide a valuable insight into how the current industry climate is affecting members’ salaries. As the remuneration results from the 2016 AusIMM Professional Employment Survey are raw and unadjusted figures, they should not be used to make any definitive or broad conclusions about the difference between men and women’s remuneration in the mining industry. However, some interesting observations can still be made about how the gender pay gap among AusIMM members compares to the wider mining industry and Australia as a whole.

As in other industries, there is a notable gap between the wages earned by men and women for comparable jobs in the mining industry. However, the mining industry does perform better than many other industries, with the gender pay gap amongst mining employees of 16 per cent being lower than the overall Australian average of 19 per cent (WGEA, 2016a).

Among respondents to the 2016 AusIMM Professional Employment Survey, the overall average difference in pay between men and women was 23 per cent, which was notably higher than the mining industry average of 16 per cent reported by the Workplace Gender Equality Agency.

The results from this year’s survey show that the number of years that a minerals professional has been working in the mining industry has a significant impact on the gender pay gap. As shown in Figure 1, for the first ten years of their career, men and women earn a similar amount each year, with no significant difference in their annual salaries. However, after they have been in the industry for more than ten years, men and women’s annual salaries diverge, with men’s salaries continuing to rise steadily while women’s flatten.

The average gender pay gap for mid-career professionals (those with between 11 and 20 years’ experience) is 22 per cent, which is a significant increase compared to those in the early stages of their career (between one and ten years’ experience), when the gender pay gap is just two per cent. While the average gender pay gap declines to 15 per cent in the latter stages of a mining professional’s career (those with between 21 and 31 years’ experience1), these results should be regarded with a high degree of caution as the number of female respondents indicating that they had been working in the minerals industry for more than 20 years was very low.

The fact that there is such a distinct divergence between men and women’s salaries at the ten-year mark of their careers is most probably due to women temporarily leaving the industry to start a family. This highlights the difficulties that women often face when resuming their career after having

children, both in terms of salary expectations and career progression.

As is to be expected, the gender pay gap trend for those working at different levels of responsibility is very similar to the one seen for experience in the minerals industry. As shown in Figure 2, for those working at levels 1 and 2 (for a definition of each responsibility level, see ‘The AusIMM Professional Employment Survey 2016’ in the October 2016 edition of The AusIMM Bulletin), the gender pay gap is negligible. In fact, the gender pay gap for those working in level 1 positions is actually 35 per cent in favour of women.

However, as the level of responsibility increases, so too does the gender pay gap, rising from just four per cent for those in level 2 positions to 17 per cent for those in level 5 positions. In terms of real dollar values, this equates to a difference of approximately $37 000 per annum for those working in positions with the greatest responsibility.

In recent years, the mining industry has made significant progress in reducing the gender pay gap, with the difference between men and women’s salaries falling by five percentage points between 2014 and 2015 (WGEA, 2016b). However, as shown by the findings from the 2016 AusIMM Professional Employment Survey, there is still much work to be done in bringing men and women’s salaries closer to parity, especially for mid-career professionals and those that take time out of their careers to start a family.

ReferencesWorkplace Gender Equality Agency (WGEA), 2016a. WGEA data explorer [online]. Available from: data.wgea.gov.au

Workplace Gender Equality Agency (WGEA), 2016b. Gender pay gap statistics [online]. Available from: www.wgea.gov.au/sites/default/files/Gender_Pay_Gap_Factsheet.pdf

Observations can be made about how the pay gap among AusIMM members compares to the wider mining industry.

Professional Employment 2016

The gender pay gap and the mining industryWhat the 2016 AusIMM Professional Employment Survey says about the gender pay gap

Rex Berthelsen FAusIMM(CP), President, AusIMM

1 31 years’ experience was used as the cut-off point as only four female respondents indicated that they had worked in the industry for more than 31 years.


Professional Employment 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

$50,000

$0

$100,000

$150,000

$200,000

$250,000

Years of experience

Aver

age

annu

al s

alar

y

$300,000

Average of 2015 Salary - Female


Average of 2015 Salary - Male


$50,000

$0

$100,000

$150,000

$200,000

$250,000

Years of responsibility

LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5

Aver

age

annu

al s

alar

y





Figure 1. Average annual salary by years of experience 2015-16.

Figure 2. Average annual salary by level of responsibility 2015-16.


2017 Conferences

Minesafe International 20171-2 May 2017Perth, Western Australiawww.minesafe.ausimm.com.au

Eighth World Conference on Sampling and Blending9-11 May 2017Perth, Western Australiawww.wcsb8.com

Iron Ore 201724-26 July 2017Perth, Western Australiawww.ironore.ausimm.com.au

The Australian Mine Ventilation Conference 2017 28-30 August 2017Brisbane, Queenslandwww.austminevent.com.au

MetPlant 2017 11-12 September 2017Perth, Western Australia www.metplant.ausimm.com.au

Tenth International Mining Geology Conference 2017 20-22 September 2017Hobart, Tasmaniawww.mininggeology.ausimm.com.au

13th AusIMM Underground Operators’ Conference 2017 16-18 October 2017Gold Coast, Queenslandwww.undergroundoperators.ausimm.com.au

AusIMM Professional Development

www.ausimm.com/conferences www.ausimm.com/learning

Lena Abrahamsson, Professor, Luleå University of Technology and keynote speaker at the 13th AusIMM

Underground Operators’ Conference 2017.

AusIMM Online LearningWatch key speakers from AusIMM conferences you were not able to attend in person, as well as access live or recorded webinars to enhance your technical, business or personal skills.

International Mine Management Online Series

In 2016 the AusIMM brought together key leaders for our International Mine Management conference to share how they have transformed their organisations to drive results in this time of low commodity prices.

Watch these exclusive presentations online in your own time as the foremost leaders in our industry detail the strategies used to bring in high-performance cultures and deliver value.

2015 VALMIN Code Roadshow

The VALMIN Committee, in collaboration with its parent bodies (AusIMM and AIG), hosted an extensive program of seminars around Australia, to build industry professionals’ understanding of the VALMIN Code, 2015 Edition.

If you were not able to attend the roadshow, the recording is now available for purchase. Visit www.ausimm.com/learning


www.ironore.ausimm.com.au

IRON ORE 2017Building Resilience

24–26 July 2017, Perth, AustraliaBookyour boothtoday

Sponsors and Exhibitors

KEYNOTE SPEAKERSAllon Brent MAusIMM, Principal, Global Minerals MarketingAdrian Doyle, Senior Consultant, Iron Ore Costs, CRU GroupJohn Dumbill, General Manager, Operations Centre and Integrated Production

Planning, Rio TintoBarry Fitzgerald, Chief Executive Officer, Roy Hill Holdings

CONFERENCE TOPICS• Exploration including ore genesis, geology, geophysics and geochemistry.

• Geostatistics and ore reserve estimation covering geostatistical methods andreporting requirements.

• Ore characterisation including classification, mineralogy, petrology andgeometallurgy at regional, mine and orebody scale.

• Mining including all aspects from pit design and optimisation to blasting, orehaulage, automation, grade reconciliation and surface miners.

• Processing including crushing, screening, grinding, beneficiation, dewatering,filtration, materials handling, tailings disposal, granulation, sintering, pelletisingand value adding.

• Automation including process control, drones, autonomous vehicles and remoteoperation.

• Project optimisation and development including cost reduction and debottlenecking.

• Health, safety, environment and community including regulatory, environmental,heritage, community, reducing emissions and carbon footprint, waterconservation, mine rehabilitation, mine closure and safety issues.

• Technical marketing including market outlook and the impact of product qualityon iron and steel making.

• Logistics and utilities including road, rail, shipping, port, pumping, water, gas andelectricity supply.

• New equipment including development, performance and industry needs.

SPONSORSHIP AND EXHIBITION OPPORTUNITIES STILL AVAILABLE

Showcase your business at the conference and register your interest in

sponsorship today. A trade exhibition will be held in association with the event and

will provide an excellent opportunity for companies to display their products and

services to the delegates. The sponsorship and exhibition package contains a

variety of levels. Should you wish to discuss opportunities, develop a package to

suit your budget or have any questions, please contact Event Management.

EVENT MANAGEMENT: The AusIMM

For all enquiries including sponsorship and exhibition opportunities, please contact:

Rachel Magill, Senior Coordinator, Events

Telephone: +61 3 9658 6128 | Email: [email protected]

Gold Sponsors

Iron Ore 2017 Ad-F2+_X 2/11/2016 11:41 am Page 1

significant infrastructure investment, particularly in transport, electricity, water and communications.

Illegal mining is also a significant concern in Peru, with 53 000 hectares of the Amazon rainforest destroyed due to illegal gold mining. Illegal gold mining accounts for 20 per cent of Peru’s total gold production, which equates to approximately US$3 billion. However, the Peruvian government has recently made efforts to curb illegal mining by requiring illegal miners to formalise their mining concessions.

StrengthsAs of 2013, Peru was the:■■ second-largest producer of silver

(accounting for approximately 17 per cent of world supply)■■ third-largest producer of copper

(~7 per cent), tin (~10 per cent) and zinc (~10 per cent)■■ fourth-largest producer of

molybdenum (~8 per cent)■■ fifth-largest producer of gold

(~4 per cent).The Peruvian government is politically

and macroeconomically stable and is committed to pursuing an investor-friendly policy climate. Over 100 mining companies currently operate mines in the country, including Rio Tinto, Anglo American and Newmont, and a further US$59.9 billion worth of major projects are waiting to be developed. In the current environment of low commodity prices, the Peruvian government has stated that it is not considering new taxes and royalties, and that it may even introduce new initiatives to attract mining investment.

WeaknessesPeru is highly dependent on its mining industry, which accounts for approximately 24 per cent of the country’s direct foreign investment and 12 per cent of its GDP. This strong reliance on the minerals industry means that Peru’s economic position is vulnerable to fluctuations in world commodity prices. This is evidenced by the fact that economic growth slowed in Peru in 2014 and 2015 as a result of the fall in commodity prices.

Social inequality is a serious issue in

Peru, with 24.5 per cent of the population living below the poverty line in 2013. While this is a significant improvement compared to a decade earlier, when 48.5 per cent of the population were living below the poverty line, it is still a concern for miners looking to establish operations in the country. In recent years, a number of high-profile mega-projects have been postponed in Peru due to environmental or community concerns, strikes or anti-mining protests, including the Conga project, Tia Maria, Rio Blanco and Canarco.

OpportunitiesPeru has a wealth of proven mineral reserves, ranking second in the world for silver, third for copper and zinc, fourth for lead and molybdenum and ninth for gold. In addition, much of the country’s area has yet to be explored. This means that Peru has the greatest untapped potential for new discoveries and production in South America, and it has the capacity to double or triple its current level of output.

The Peruvian government has actively promoted the country’s potential as a mining destination through investor-friendly policies and environmental regulatory reforms, giving Peru one of the most open investment regimes in the world.

ThreatsAs in most other jurisdictions, gaining a social licence to operate is an important consideration for miners looking to commence operations in Peru. Significant income and regional inequality means that some parts of the country require

PeruPeru is an increasingly attractive mining destination due to its considerable mineral reserves and favourable regulatory environment. The country has a well-established mining industry and is one of the world’s largest producers of base and precious metals.

All information in this profile came from the following sources:Central Intelligence Agency, 2016. The World Factbook: Peru [online]. Available from: www.cia.gov/library/publications/the-world-factbook/geos/pe.html

EY, 2014. Peru’s mining & metals investment guide: 2014/2015 [online]. Available from: www.ey.com/Publication/vwLUAssets/EY-Peru-mining-metals-investment-guide-14-15/$FILE/EY-Peru-mining-and-metals-investment-guide-2014-2015.pdf

US Geological Survey, 2015. 2013 Minerals Yearbook: Peru [online]. Available from: minerals.usgs.gov/minerals/pubs/country/2013/myb3-2013-pe.pdf

The Peruvian government has actively promoted the country’s potential as a mining destination.

Key facts

Population: 30 741 062 (July 2016 est.)Land area: 1 279 996 km2

Natural resources: copper, silver, gold, petroleum, timber, fish, iron ore, coal, phosphate, potash, hydropower, natural gasGDP: US$389.1 billionMinerals production (as of 2013): copper – 1.3 Mt; silver – 3407 t; gold – 136 088 kg; iron ore – 10.1 Mt; coal – 0.19 Mt. Mineral reserves (as of 2013): copper – 68.4 Mt; silver – 98 869 t; gold – 2110 t; iron ore – 1.4 Bt; coal – 1.3 Bt


Country snapshot

BRAZIL

LIMA

ECUADORCOLOMBIA

1

2

3

4

5

6

Map by Huhsunqu. Used under CC BY-SA 3.0.

1 Yanacocha (gold)

2 Lagunas Norte (gold)

3 Antamina (copper, zinc, molybdenum, silver and lead concentrates)

4 Toromocho (copper)

5 Las Bambas (copper)

6 Cerro Verde (copper and molybdenum)

SELECTED MINING PROJECTS IN PERU


Country snapshot

An introduction to mentoringDr Ali Burston, Organisational Psychologist, Metisphere

Fostering a mentoring relationship can have positive career benefits for both mentors and mentees


Lead Article - Analysis

What is mentoring? Mentoring involves a partnership between a less-experienced individual (the mentee) and a more-experienced individual (the mentor) where the purpose is the personal and/or professional growth of the mentee. Although the goals of the mentoring relationship may differ across both settings and relationships, nearly all partnerships involve the acquisition of knowledge (Allen and Eby, 2007).

Mentoring has been of interest to the business community since the 1970s after claims that it contributed to the success of very senior executives (Gibb, 2008). These early mentoring relationships developed informally through mutual interest. Since then, mentoring has undergone considerable research as organisations and industry groups have created structured mentoring systems to leverage off these advantages.

Mentoring is sometimes confused with other types of developmental activities. In particular, the distinction between coaching and mentoring is often ambiguous. Coaching is a short-term, task-focused intervention designed to teach skills and improve performance in order to take on new responsibility (Harvard Business School, 2004). In contrast, mentoring relationships are generally longer term, are focused on strategic career progression and incorporate a holistic approach to the mentee’s professional and personal development.

On a professional level, mentors provide career advice and guidance. If a mentor and mentee both work for the same organisation, the mentor may actively support their mentee by recommending them for particular assignments or introducing them to more

senior members of the organisation, commonly known as ‘sponsoring’ (Ghosh and Reio, 2013). Where a mentor and mentee work for different organisations, mentors provide external objective advice by sharing the benefits of their own experiences and industry knowledge and suggesting specific career strategies to assist the mentee in developing relevant skills and knowledge (Ghosh and Reio, 2013).

On a personal level, a mentor can provide a source of psychosocial support that contributes to the mentee’s sense of professional effectiveness, identity and competence (Ghosh and Reio, 2013). Mentors provide a source of support through success and failure, are a sounding board for ideas and can act as a role model for the mentee to emulate (Ghosh and Reio, 2013). Given the right motivation, mentors can benefit greatly from sharing advice and guidance with a less-experienced person.

Types of mentoringMentoring in business or industry can involve different formats, including self-directed (informal) or participating in a structured program (formal). However, in both formats, the focus is on the mentee, their career and support for individual growth and maturity.

Self-directed (informal) mentoring relationships generally develop between a mentor and mentee due to mutual interest, respect and friendship (Inzer and Crawford, 2005). The quality of the mentoring relationship is related to mentee benefits, so it is not surprising that informal relationships, sustained by mutual interest from both parties, are more often associated with optimal outcomes (Gilmore, Coetzee and Schreuder, 2005).

Mentoring relationships are generally longer term, are focused on strategic career progression and incorporate a holistic approach.


Analysis

Structured (formal) mentoring relationships involve participating in an industry-led or organisational mentoring program (Inzer and Crawford, 2005) typically designed to meet organisational or industry-wide objectives (Parise and Forett, 2008). Structured programs may include training and specific goal setting and may mandate meeting frequency and program duration. Structured mentoring programs clarify the roles of mentors and mentees and can include a training component (Allen, Eby and Lentz, 2006; Eby and Lockwood, 2005). Structured mentoring programs also control the matching process, so while it may take longer to establish a new and trusting relationship initially, structured mentoring can have very positive outcomes if it is managed in a professional manner.

How can having a mentor be beneficial throughout my career? In a business context, a mentor is an experienced individual that offers information, advice and guidance for the mentee’s personal and professional development (Harvard Business School, 2004). The role of a mentor is likely to vary over an individual’s career in line with common developmental tasks in each career stage (Isabella, 1988). For example, the benefits of having a mentor in the following career stages can be defined as follows.

Student The most important tasks for students are to discover their particular interests, skills and aptitudes and choose a career direction (Hess and Jepsen, 2009). Mentors may be able to assist with questions such as:■■ What is a mining cycle?■■ What are the advantages/disadvantages

of working on-site?■■ What is it really like to work as a

(insert role here)?■■ Are you able to provide feedback on

my résumé?By sharing their own journey and

work experiences, mentors give students a realistic preview of a profession and industry and can suggest strategies to enter a particular career pathway. Mentors may also be

able to alert students to vacation/apprentice opportunities or recommend them for casual work or junior roles in an organisation.

Early career stage (1-5 years into career)In the early career stage, individuals are creating their professional identity, developing technical competence in their role and building the political skills to successfully negotiate the world of work (Isabella, 1988). At this career stage, mentors may be able to assist with questions such as:■■ What are the advantages/disadvantages

of working on-site and when should I transition?■■ What industry groups will provide the

best networking opportunities for me?■■ What does my ‘future self ’ look like?■■ When is a good time to pursue further

study?Mentors can provide advice to young

professionals on how to manage challenging situations and provide insight into the ‘unwritten rules’ of an organisation, profession or industry.

Young professional (5-10 years into career)Once technical skills are established, individuals frequently want their expertise recognised and strive for career progression, which often has to be balanced with family and personal commitments (Isabella, 1988). Working remotely, doing long hours and being on a ‘fly-in, fly-out’ roster are common in the mining sector but may impose additional challenges on individuals and relationships (Pirotta, 2009). At this career stage, mentors may be able to assist with questions such as:■■ How can I develop the best relationship

with my superintendent?■■ How do I work effectively with different

personalities in my team?■■ How do I find stability in an unsettled

climate?■■ When do I know if I am on the right

track – am I doing what I like doing now?A mentor can provide empathy and

practical strategies to address career issues and enhance an individual’s ability to adapt and cope with the unique challenges posed by the mining industry.

Mid-point (10-20 years into career)For individuals at the mid-point of their career, there may be a choice of becoming a technical specialist in their field or moving into more senior management or corporate roles, such as project management or business improvement. While being mentored themselves, individuals at the mid-point of their career may also be mentoring less-experienced mentees. In this career stage, mentors may be able to assist with questions such as:■■ When is a good time to pursue further

study, for example an MBA?■■ When should I review my short- and

long-term goals?■■ What type of satisfaction could I receive

from volunteering in my community?■■ Am I making a difference?Mentors may assist mentees in

developing the strategic thinking, commercial awareness and financial knowledge necessary for senior managerial or executive board roles.

Mature (20+ years into career)Individuals that are well-established in their profession and looking towards the end of their career may reflect on their career journey, examine their priorities and have an increased focus on developing others and giving back to the industry (Isabella, 1988). At this career stage, very senior mentors may be able to assist with questions such as:■■ How has my career strategy played out?

What has and what hasn’t worked? ■■ How have I achieved my goals and what

can I pass on to young professionals?■■ Am I interested in seeking new Board

positions or enhancing community engagement?■■ Do I have a strong social and

professional network?■■ What are the advantages of being a

mentee? As the purpose of mentoring is to

develop personal and/or professional growth in a mentee, there are numerous advantages to sourcing a mentor. Some opportunities that are made available by seeking a mentor include: ■■ develop strategic career planning

techniques and the facilitation of career goal achievement (Gilmore, Coetzee and Schreuder, 2005)


Lead Article - Analysis

■■ learn from a mentor’s industry experiences, particularly how to work through mining cycles and become adaptable in a role■■ learn from a more experienced person

about success, sustainability and adaptability■■ learn about self-promotion and

capitalise on a mentor’s networks (to enhance the mentee’s own networks)■■ work through organisational topics

such as conflict resolution, workplace politics and a changing workforce.

As a result of these opportunities for growth, research has confirmed that mentees receive numerous personal and professional benefits, including:■■ greater job satisfaction (Allen et al,

2004)■■ lower levels of work stress (Allen et al,

2004)■■ higher self-esteem (Allen et al, 2004)■■ increased technical and behavioural

competence (Gilmore, Coetzee and Schreuder, 2005)■■ increased confidence (Gilmore, Coetzee

and Schreuder, 2005).The greatest benefits of mentoring

result from a high-quality relationship between mentor and mentee (Ragins, Cotton and Miller, 2000). When approaching a mentoring partnership, mentees should be prepared to listen, reflect, discuss and learn from an experienced professional. Importantly, mentees must respect and appreciate their mentor’s time and efforts (Harvard Business School 2004; Wallace and Gravells, 2007).

What are the advantages of being a mentor?Mentors play a crucial role in the lives of their mentees, organisation, profession and industry through their development of the next generation of high-performing

professionals. Becoming a mentor offers many opportunities for personal and professional growth, including:■■ learn more about personal strengths

and areas for development■■ engage with the next generation and

keep abreast of changing workplace values, culture and technology■■ share experiences, tell stories and

provide guidance to a less-experienced person■■ create pathways for a less-experienced

person that contain clarity, transparency and are sustainable■■ share networks and provide new

prospects.As a result of these opportunities for

growth, research has confirmed that mentors receive numerous personal and professional benefits, including:■■ enhanced job satisfaction (Ghosh and

Reio, 2013)■■ enhanced organisational commitment

(Ghosh and Reio, 2013)■■ an intrinsically rewarding experience in

watching others develop with the knowledge that they have contributed to a mentee’s success (Allen, 2003; Parise and Forret, 2008)■■ enhanced leadership skills (Allen and

Eby, 2007)■■ higher work performance (Ghosh and

Reio, 2013).Mentors can be of any age, but are

recommended to be experienced and influential and have a history of success in their field (Conway, 1998; Delahaye, 2011; Otto, 1994). When approaching a mentoring partnership, mentors will need to develop rapport, trust and confidence in their mentee to ensure positive outcomes for both parties.

To purchase mentoring webinars presented by Dr Ali Burston, visit www.ausimm.com/webinars

ReferencesAllen T D, 2003. Mentoring others: a dispositional and motivational approach, Journal of Vocational Behavior, 62(1):134–154.

Allen T D and Eby L T, 2007. The Blackwell Handbook of Mentoring: A Multiple Perspectives Approach (Blackwell Publishing Ltd: Hoboken).

Allen T D, Eby L T and Lentz E, 2006. Mentorship behaviors and mentorship quality associated with formal mentoring programs: closing the gap between research and practice, Journal of Applied Psychology, 91:567–578.

Allen T D, Eby L T, Poteet M L, Lentz E and Lima L, 2004. Career benefits associated with mentoring for proteges: a meta-analysis, Journal of Applied Psychology, 89(1):127–136.

Conway C, 1998. Strategies for Mentoring: A Blueprint for Successful Organizational Development (John Wiley & Sons Ltd: Chichester).

Delahaye B, 2011. Human Resource Development: Managing Learning and Knowledge Capital, third edition (Tilde University Press: Melbourne).

Eby L T and Lockwood A, 2005. Protégés and mentors reactions to participating in formal mentoring programs: a qualitative investigation, Journal of Vocational Behavior, 67:441–458.

Ghosh R and Reio T G, 2013. Career benefits associated with mentoring for mentors: a meta-analysis, Journal of Vocational Behavior, 83(1): 106–116.

Gibb S, 2008. Human Resource Development: Process, Practices and Perspectives, second edition (Palgrave Macmillan: New York).

Gilmore N, Coetzee M and Schreuder D, 2005. Experiences of the mentoring relationship: a study in a mining company, SA Journal of Human Resource Management, 3(3):27–32.

Harvard Business School, 2004. Coaching and Mentoring: How to Develop Top Talent and Achieve Stronger Performance (Harvard Business School Publishing: Boston).

Hess N and Jepsen D M, 2009. Career stage and generational differences in psychological contracts, Career Development International, 14(3):261–283.

Inzer L D and Crawford C B, 2005. A review of formal and informal mentoring: processes, problems, and design, Journal of Leadership Education, 4(1):31–50.

Isabella L A, 1988. The effect of career stage on the meaning of key organizational events, Journal of Organizational Behavior, 9(4):345–358.

Otto M L, 1994. Mentoring: an adult developmental perspective, in Mentoring Revisited: Making an Impact on Individuals and Institutions, (ed: M A Wunsch) (Jossey-Bass Publishers: San Francisco).

Parise M R and Forret M L, 2008. Formal mentoring programs: the relationship of program design and support to mentors’ perceptions of benefits and costs, Journal of Vocational Behavior, 72(2):225–240.

Pirotta J, 2009. An exploration of the experiences of women who FIFO, The Australian Community Psychologist, 21(2):37–51.

Ragins B R, Cotton J L and Miller J S, 2000. Marginal mentoring: the effects of type of mentor, quality of relationship, and program design on work and career attitudes, Academy of Management Journal, 43(6):1177–1194.

Wallace S and Gravells J, 2007. Mentoring, second edition (Learning Matters: Exeter).

When approaching a mentoring partnership, mentees should be prepared to listen, reflect, discuss and learn from an experienced professional.


Analysis

Navigating volatility – do you change your business or the way your business works?

business forecasts (eg metal/energy prices, foreign exchange rates) are updated.

EY analysis is clear that mining companies need a different mindset in this environment if they want to maintain a strong balance sheet and develop plans for long-term profitability.

Too many companies have viewed cost reduction measures and productivity initiatives as a once-off, when what they need to be doing is embedding continuous improvement in their DNA.

Cost reduction – creating sustainable and long-term valueIn recent times, miners started eliminating costs from all areas of the business, including reducing capital expenditure and labour. However, there are still a lot of opportunities to remove costs from the business.

Miners need to maintain a focus on

increasingly unpredictable. The longer-term economic outlook is also volatile, leading to the possibility of substantial revisions to long-term metal price forecasts and making it hard for mining and metals companies to plan for the future.

The impact of China and emerging market demand is also difficult to understand or predict. Therefore, as prices fluctuate and there is limited pricing or demand visibility, management is struggling to plan operations and capital expenditure.

Brexit has brought additional uncertainty to this, with questions on how it may impact an already slow growth in the global economy. Locally, the Australian federal election has potentially provided further uncertainty.

Investment decisions and business strategy need to factor in the variability in outlook, particularly as long-range

Mining companies must move faster to generate cash and strengthen their balance sheets if they are to

successfully navigate ongoing volatility. This is a challenge that management will need to deal with for some time. EY’s recently released report, Navigating volatility: do you change your business or the way your business works?, identifies six key areas that mining and metals companies should focus on to strengthen their business and manage ongoing volatility: ■■ cost reduction■■ working capital■■ productivity■■ capital effectiveness■■ portfolio strategy■■ financing.Fluctuations in commodity prices have

become more rapid and frequent as commodity demand has become

The key to success is agility and getting into shape to deal with volatility now. It is important to focus on six areas that will lead to more effective cash management.

Andrew Carrick, Queensland Mining & Metals Leader, EY


Lead Article - Opinion

building a long-term sustainable cost base while making certain that cost reduction activities do not contribute to value erosion.

The four key ways to achieve effective cost reduction are: 1. general expenses 2. low-cost country sourcing 3. offshoring/outsourcing support functions4. procurement.

It is important that every activity in the business is challenged, as the ‘long tail’ of smaller costs are often overlooked in traditional cost-cutting approaches. Even small costs should be pursued because they become significant in number when combined. For example, challenging the need for travel and instead considering increasing the use of online and teleconferencing options for meetings can save millions.

One company has placed its safety equipment in vending machines accessible by staff cards, allowing for a better ‘think before use’ approach. This approach has accounted for several million dollars in annual savings, and safety equipment usage has been cut by as much as 50 per cent at some sites.

Many miners have moved support functions such as finance, IT, procurement and human resources offshore to low-cost countries. There are two broad delivery models: 1. leveraging a captive shared service center that is owned and operated by the parent company 2. outsourcing to a third-party service provider.

From Australia or North America, every role moved offshore generates savings in the range of US$40 000-50 000 per role. In addition to labour arbitrage, service providers are offering 20-60 per cent

and more discipline around outcomes in set timeframes and accountability for the implementation of new arrangements. Much of this activity could be outsourced.

Next-stage innovation and procurement serviceNow is the time to aggressively explore innovations that can further streamline procurement activities and enable greater visibility and control of spend. Associated benefits include:■■ increased leverage and buying power■■ reduction in maverick spend■■ reduction in scope creep■■ more control over services and

consulting expenditure.The availability of smart technology

and mobility solutions can further accelerate the automation of many basic ordering, buying and procurement activities. Digital solutions around automatic replenishment and guided buying are becoming more readily available. Digitisation of information also creates the right environment to explore areas such as smart contracting, which automates the contract and vendor management processes.

Working capital – unlocking cash Despite some improvements across the sector, the report notes that working capital is another area that remains ripe for improvement, with aggregate levels of working capital in the sector of more than US$200 billion. It points to processes and systems across the supply chain as the biggest area for miners to make gains. Releasing cash from working capital will require cultural change and data analytics.

productivity over the life of a five-year contract. Outsourcing has moved beyond the typical support function, with many technical areas now being delivered from offshore. These newer areas include:■■ maintenance scheduling■■ seismic/geological data analysis■■ engineering and technical drafting■■ spare parts catalogue management ■■ strategic sourcing.Miners have had a strong focus on

procurement in the last three to five years. However, the pace of reform has not been fast enough, and there are still a number of areas they can consolidate and transform to achieve far greater value. Opportunities exist in the following three main areas.

Automation and consolidation of operational procurementMany miners are yet to fully institute and realise the benefits of the simple automated solutions that are readily available in their existing systems. There are a number of simple low-cost solutions to shift manual purchasing to ‘hands off’ channels that can be easily executed with a viable business case.

Strategic procurementMany miners have had a strong focus on cancelling existing contracts and renegotiating new arrangements. However, it is evident that letting go of the old mindset and procurement strategies has not been easy or quick enough for some. Payment terms, for example, are still too generous in some markets, and alternative supplier strategies are not being aggressively pursued. This focus should continue with much greater speed

Many miners are yet to fully institute and realise the benefits of the simple automated solutions that are readily available in their existing systems.

Figure 1. Six key areas that mining and metals companies should focus on to strengthen their business and manage ongoing volatility.

SIX LEVERS

Cost reduction

Working capital

Productivity Capital effectiveness

Portfolio strategy

Financing


Opinion

that people will play in the productivity transformation cannot be overstated; productivity improvement is the role of everyone in the organisation. Relentless pursuit of loss, such as ensuring zero harm, can transform the business entirely.

Three key focus areas to address integration and improve productivity include engagement, measurement and reward, and ongoing talent management.

Mining companies have generally been too slow to consider how they can apply best practice processes from other sectors. Consumer products companies have historically had lower margins, so capital and cost efficiency has always been a focus. There are examples of some of these companies embedding process improvements that have enabled year-on-year savings of US$1.2 billion over the past three years.

Miners can no longer rely on conventional wisdom and expertise from within the sector; they must cast the net wider and seek outsiders’ experience to get that next productivity and efficiency boost.

Capital effectiveness – making your existing assets work harderA program built on the back of good asset management fundamentals will work as a platform to drive productivity and manage risk. Extracting more value from existing assets presents an opportunity to improve asset management capability.

Both areas also have a critical role to play in improving productivity, particularly when obvious opportunities across operations have already been addressed.

Mining companies focused on working capital have typically achieved reductions of 30 per cent or more. For larger mining companies, this can mean reclaiming hundreds of millions of dollars of capital back into the business.

Processes and systems across the supply chain, particularly with regard to inventory, accounts payable, and work-in-progress and finished goods, are the biggest areas where gains can be made. The next wave of improvements will require cultural change and data analysis.

Mining companies need to challenge themselves on best practice in order to find the next 10-20 per cent of productivity savings, and they must learn from other sectors, particularly manufacturing, airlines and industrial products.

Productivity – a transformational end-to-end approach will have significant impactThis is still the number one operational risk in the mining sector. A transformational, integrated, systematic end-to-end approach will drive significant improvements. Companies have made progress to improve labour productivity, but have hardly scratched the surface on asset productivity. The focus needs to be on building a productive, cost-effective end-to-end value chain. Adopting a

process model and digital approach will be key enablers to addressing the productivity risk.

The key to achieving long-term sustainable productivity improvement lies in:■■ A focus on the assets via an end-to-end

view. To achieve an end-to-end focus, mining companies need to consider:

■■an integrated governance structure across productivity initiatives

■■optimal asset utilisation via loss elimination analysis and practices

■■data analytics to provide quality information to support effective decision-making and productivity gains

■■engaging the whole workforce and ensuring that targets drive the right behaviors.■■ Relentless pursuit of loss. Loss needs to

be transparent, understood and acted upon. In our experience, reasons for loss fall under four major categories: 1. reliability – eg equipment and material supply losses2. utilisation – eg labor supply and integration losses3. throughput – eg payload and rate losses4. quality – eg ore quality and ore to waste losses.■■ Focus on leadership and culture.

Productivity is an issue on the CEO’s agenda and needs a CEO solution to be resolved. The productivity journey requires a change of mindset, enabling and empowering operations to pursue losses. Leadership plays an important role in making this happen. The critical role

Figure 2. From our experience working with the global diversified miners, there are a number of elements to ‘get right’ to quickly release cash as follows:

HOW TO QUICKLY RELEASE CASH

Establish a global steering committee with representation across functions and business units – reporting to leadership

Set working capital reduction targets that are signed off and monitored by leadership

Obtain a clear mandate with clear sponsorship and communicated to the whole business

Establish working capital dashboards that use transactional data to monitor and make decisions

Apply dedicated resourcing (internal and external) for the program management office

Increase visibility of the program and control from the center to gain momentum, eg through a cash war room

Quickly analyse all of the working capital levers and identify if an opportunity exists Apply a strong focus

on sustainable change management at the front line, as they control the levers

Robust governance

Create a cash culture

Issue a mandate

Dedicated PMO

Analyse the levers

Set targets

Central control

1

5

26

37

4

8

GLOBAL WORKING CAPITAL

REDUCTION

Data analytics



intrinsically linked to broader macroeconomic factors. This is made even harder by the current heightened level of volatility.

Active portfolio management will remain a key priority in constructing an optimum portfolio. There needs to be a focus on optimising the performance of assets through portfolio improvement and cost-control measures.

Financing – balance sheet flexibility is key during this period of volatilityWhile there is a significant level of debt across the sector and leverage is high on the back of lower earnings, a large proportion of debt is covenant-lite and many corporates have taken action to

push out maturities and reduce servicing costs. Therefore, the associated distress is perhaps lower than might otherwise be expected in such difficult market conditions.

Balance sheet flexibility remains critical during this period of volatility, as does the associated ‘right-sizing’ of debt levels to the underlying profitability of operations. Releasing capital to pay down debt can be achieved via dividend cuts, divestments and streaming.

Where to go from here?The following is a summary of the next possible steps:■■ consider all six levers ■■ break free from pro-cyclical, short-term

behaviour and consider the impact of your actions on long-term productivity and future growth■■ look to other sectors for business

optimisation ideas■■ the importance of people as success

requires leadership from the top■■ always consider the reaction of

stakeholders and shareholders■■ don’t limit your thinking as to

what’s possible.

This can help to drive productivity and manage risk in a cost-constrained environment.

Key areas to achieve this are advanced asset management, sustaining capital and capital productivity.

Portfolio strategy – capital allocation and portfolio strategy are critically linkedEmpirical research suggests that companies that actively and dynamically manage their portfolio of assets achieve better longer-term returns than companies with a buy-and-hold strategy. Effectively managing portfolios is a difficult task for the mining sector as capital decisions are played over a long period of time and profitability is

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Opinion

significant and measurable social impacts beyond the transactional outcome.

Supply Nation’s membership encompasses many of the largest privately owned companies across numerous industries, including mining, financial services and construction, and continues to grow at around 25 per cent year-on-year.

In 2015, Supply Nation opened its publicly available directory, Indigenous Business Direct, to Registered Indigenous Businesses. Registered Indigenous Businesses are businesses that are at least 50 per cent Indigenous-owned, while Certified Suppliers are businesses that are 51 per cent owned, managed and controlled by Indigenous people.

Supply Nation is the leading certification body for Indigenous business. Our rigorous registration and certification process for Indigenous-owned businesses is the most comprehensive of its kind and is based on world best practice. The certification process includes site visits, interviews and official documentation of all claims. Our database of businesses, Indigenous Business Direct, features over 1000 Indigenous businesses spanning every state and territory and all industry sectors. Every business in the directory has had to undertake a verification process to ensure the bona fides of Indigenous ownership. This process ensures that members can be confident of Indigenous ownership in their supplier base.

employment and channels greater social value back to Indigenous communities.

Mining operations typically occur in remote and rural areas of Australia. With approximately 43 per cent of Aboriginal and Torres Strait Islander people living in regional areas and 24 per cent living in remote areas, mining companies are in a unique position to support real change in the communities in which they operate. It is well documented that a partnership approach with Indigenous-owned businesses is a way of instigating significant change while also improving the reputation of the mining and minerals industry. Taking advantage of this opportunity to engage drives positive benefits for both the corporations and the local Indigenous communities.

Supporting members and suppliersSupply Nation has a membership base of more than 230 of Australia’s top corporate organisations and state and federal government agencies. Supply Nation’s members are central to a growing movement in Australian procurement: the development of sustainable, innovative, responsive and flexible supply chains. In addition to the competitive advantage of maintaining a diverse supply chain, engaging with Indigenous-owned businesses creates

Supply Nation’s vision is of a vibrant, prosperous and sustainable Indigenous business sector. Founded in

2009 by some of Australia’s leading Indigenous entrepreneurs with the support of government, Supply Nation champions the Indigenous business sector and supports the integration of Indigenous-owned businesses into the supply chains of Australian companies and government agencies.

Supply Nation aims to increase opportunities for Indigenous-owned businesses to supply their goods and services to large organisations. Supplier diversity puts underrepresented businesses on a level playing field with other qualified suppliers when it comes to competing for the supply of quality goods and services. The data clearly shows that supplier diversity drives significant and measurable long-term business benefits, aside from the goods and services, which can ultimately provide a unique experience to customers. The addition of Indigenous-owned businesses brings increased competitiveness, innovation and savings to the supply chain.

However, it is often not the business benefit that is the initial driver for supplier diversity. One of the major benefits of opening the door to additional markets and engaging in supplier diversity is that it facilitates the growth of Indigenous businesses, which results in increased economic activity and

Connecting Australia with Indigenous-owned businesses

Laura Berry, CEO, Supply Nation

Transforming Australia’s economic landscape through supplier diversity



Creating an environment where members and suppliers can connect, develop relationships and identify future procurement opportunities is integral to the work of Supply Nation. Supply Nation assists members with tools and strategies to embed supplier diversity within their supply chain through a tailored account management model. Supply Nation also provides support for:■■ business matching■■ opportunity briefings■■ supplier promotions■■ external training opportunities■■ the Connect conference and tradeshow■■ networking events – eg ‘Meet the

Buyer/Supplier’.With access to national and

international research to inform best practice, Supply Nation is in a unique and privileged position as a supplier diversity body to facilitate partnerships with the ultimate objective of fostering commercial relationships between members and suppliers.

One of the key platforms supporting supplier diversity in its membership has been the launch of an innovative new tool – the Australian Supplier Diversity Index

Indigenous-owned businesses to meet their targets.

Since the launch of Indigenous Business Direct, Supply Nation has seen a 250 per cent increase in the number of businesses listed. The IPP will increasingly drive more business to Indigenous Business Direct, and under this policy, organisations now contracting to the federal government are required to demonstrate Indigenous participation in the supply chain for all contracts valued over $7.5 million. Supply Nation is well-placed to assist businesses in sourcing and connecting with Indigenous businesses to meet their requirements. As a one-stop shop for any member of the public, procurement professional or buyer in any organisation to buy from Indigenous-owned business, it is a critical piece of the puzzle in providing visibility

(ASDI). ASDI is a supplier diversity assessment tool that measures supplier diversity policy, practice and performance and produces tailored recommendations of actions that should be taken to improve supplier diversity in an organisation. As an outcome of ASDI, Supply Nation will be producing industry insights into the maturity of Australian supplier diversity for the first time within the next 12 months.

Supply Nation is a strategic partner of the federal government to support the Indigenous Procurement Policy (IPP). Launched in July 2015, the IPP has mandated targets for all government agencies to achieve with Indigenous-owned businesses, and specifically names Supply Nation’s directory, Indigenous Business Direct, as a first point of call for procurement teams searching for

Mining companies are in a unique position to support real change in the communities in which they operate.

Heath Nelson, Community Development Manager, Fortescue; Rebecca Alston, Senior Community Adviser, Fortescue;

and Sheila Torzyn and Leon Torzyn, Owner-Operators, Print Junction.


Opinion

for Indigenous businesses to fulfil procurement opportunities.

Supply Nation’s flagship event, Connect, is an annual conference, Indigenous business tradeshow and gala awards dinner that has grown since its inception in 2010. In 2016, Connect attracted more than 1800 attendees. The Indigenous Business Tradeshow showcased 117 diverse, vibrant and innovative Indigenous-owned businesses, making it the largest tradeshow of its kind in Australia. Attended by Indigenous business owners and procurement leaders from all over Australia, this event is a unique opportunity for buyers to meet suppliers and engage with them face-to-face.

Benefits of supplier diversityIn September 2015, Supply Nation released its social return on investment report ‘The Sleeping Giant’, which articulates many positive benefits of supplier diversity and the widespread impact to Indigenous businesses and communities. For every dollar of revenue,

Certified Suppliers create an average $4.41 of economic and social value. Indigenous-owned businesses employ more than 30 times the proportion of Indigenous people than other businesses. The Indigenous employment level in the supplier base of both Registered and Certified suppliers on Indigenous Business Direct is 48.5 per cent. Indigenous-owned businesses are far more likely to employ people from their own communities, which in turn has a direct impact on improving Indigenous employment.

Certified Suppliers profiled in the report regarded their business as a vehicle to drive change for their family and the wider community. For many of these family-owned businesses, it provides a ‘safe place’ where they can remain connected to their culture and where the young can learn, pursue careers and become leaders.

A direct result of engagement with an Indigenous-owned supply enterprise is a series of related events with a cumulative effect:

■■ increased employment in communities■■ increased leadership in Indigenous

businesses and positive role models■■ the growth of a skilled local workforce ■■ a move towards economic

independence■■ development of intergenerational

wealth■■ a more prosperous local economy.

Stories of business partnerships

Case study – Fortescue and Print JunctionFortescue Metals Group Ltd (Fortescue) is a global leader in the iron ore industry. Since it was founded in 2003, Fortescue has discovered and developed major iron ore deposits and constructed some of the most significant mines in the world. Fortescue is committed to providing sustainable training, employment and business opportunities for Indigenous people and has proactively sought to establish and execute partnerships that support long-term benefits for the communities in which it operates.

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ReferencesAustralian Bureau of Statistics, 2010. Demographic, social and economic characteristics overview: Aboriginal and Torres Strait Islander People and where they live [online]. Available from: www.abs.gov.au/AUSSTATS/[email protected]/lookup/4704.0Chapter210Oct+2010

Burton R and Tomkinson E, 2015. The Sleeping Giant – a social return on investment report on Supply Nation Certified Suppliers [online], Supply Nation. Available from: www.supplynation.org.au/Library/PageContentVersionAttachment/2dae0758-6db4-4e5e-9b42-e5925e200cbc/the_sleeping_giant_web.pdf

Creative Spirits, 2016. Aboriginal population in Australia [online]. Available from: www.creativespirits.info/aboriginalculture/people/aboriginal-population-in-australia

Department of the Prime Minister and Cabinet, 2016. Closing the gap – Prime Minister’s report 2016 [online], Australian Government, Canberra. Available from: closingthegap.dpmc.gov.au/assets/pdfs/closing_the_gap_report_2016.pdf

Fortescue’s ‘A Billion Opportunities’ program forms a critical element of the company’s approach to ending Indigenous disadvantage.

Print Junction is an Indigenous owned and operated graphic design and print business based in South Australia. The company was established almost 20 years ago, and the award-winning business has a broad range of clients across the nation.

Fortescue and Print Junction’s partnership began with a $293 print run four years ago. Fortescue first approached Print Junction at Supply Nation’s annual Connect tradeshow to discuss its capacity to produce printing for Fortescue in Western Australia. Print Junction had previous experience supplying printed items to Western Australia-based Ngarda Civil and Mining, which meant that it had the documentation and logistics in place to service the Adelaide to Perth route. The vision was to link the two businesses without exposing either party to unnecessary risks.

Despite the geographical distance, Print Junction seized the opportunities, demonstrated its capabilities and delivered on its commitments. Over time, the strong and supportive working relationship that has developed between the two businesses has enabled Print Junction to grow and invest in its business and employ local Indigenous people, demonstrating the positive outcomes of supplier diversity that flow right through to the broader community.

In 2015, Fortescue signed a three-year contract worth over $1 million with Print Junction. Earlier this year, Fortescue and Print Junction were recognised for their innovative partnership, winning the Supplier to Corporate Partnership of the Year award at the 2016 Connect Supplier Diversity Awards.

Case Study – Fortescue, Centurion and Red Dirt Transport ServicesMore recently, a partnership between Fortescue and Western Australian-owned and operated transport, freight and logistics company, Centurion, has created another significant opportunity for an

Indigenous-owned and Supply Nation Certified Supplier in the Pilbara.

Centurion awarded a subcontract to Red Dirt Transport Services for fuel delivery to Fortescue’s Pilbara-based operational sites as part of Fortescue’s ‘A Billion Opportunities’ program. Guided by a shared vision and commitment to building sustainable opportunities for Indigenous people, Centurion included local, Indigenous-owned company Red Dirt Transport Services as part of its tender for Fortescue’s 36-month fuel delivery contract, paving the way for a mutually beneficial partnership that sets an outstanding example of building capacity through collaboration.

ConclusionIndigenous economic development is a priority area for action in the Australian Government’s 2016 ‘Closing the Gap’ report. It recognises the reality and implications of economic participation, reinforced by cultural involvement, in ending the long-term disadvantage experienced by Indigenous Australians. The IPP and the introduction of similar state government policies illustrate the commitment to create an environment where Indigenous businesses can thrive.

Supply Nation is part of a broader ecosystem of organisations that support the growth of the Indigenous business sector and adopts a collaborative approach to working across the country with the various Indigenous Chambers of Commerce and the national peak body, First Australians Chamber of Commerce & Industry. It has strategic partnerships in place with the Business Council of Australia, Reconciliation Australia and Indigenous Business Australia.

Given its experience to date and demonstrated success in driving growth in the Indigenous enterprise sector and Indigenous economic development, Supply Nation will continue to embrace and play an integral role in shaping and transforming the supplier diversity landscape in Australia, with the ultimate objective of closing the substantial gap for Indigenous Australians.

Fortescue’s ‘A Billion Opportunities’ program ‘Fortescue is committed to working toward ending Aboriginal disparity in the Pilbara through the provision of economic opportunity. We have found it is critically important to set targets for diversity in procurement, just as it is important in the area of employment in order to drive positive social change. Fortescue’s ‘A Billion Opportunities’ program is a target-driven, Aboriginal business engagement program which has since inception awarded 238 contracts and subcontracts worth more than A$1.8 billion to 102 Aboriginal-owned businesses and joint ventures. It is pleasing to see other businesses and governments beginning to set increasingly ambitious targets for supplier diversity.

Supply Nation has played an important role in connecting Aboriginal businesses with Fortescue. As corporate Australia and government agencies continue to embrace Indigenous procurement strategies, Supply Nation’s work in providing a platform that creates confidence around its registration and certification of Aboriginal owned and controlled businesses is important to success.’

Heath Nelson Manager - Community Development,Fortescue Metals Group Ltd

Indigenous economic development is a priority area for action in the Australian Government’s 2016 ‘Closing the Gap’ report.


Opinion

Introduction The concept of the circular economy has been gaining traction both in Europe and China.

In Europe, the Ellen MacArthur Foundation sees its mission as accelerating the transition from a linear take-make-dispose economic model to a circular model that is restorative and regenerative by design and aims to keep products, components and materials at their highest utility and value at all times. Furthermore, the European Commission has adopted a Circular Economy Package, including revised legislative proposals on waste, to stimulate Europe’s transition towards a circular economy to boost global competitiveness, foster sustainable economic growth and generate new jobs. China’s Circular Economy initiative is effectively a sustainable consumption and production program utilising cleaner production, industrial ecology and life cycle management approaches to meet the national challenges of maintaining rapid economic growth while simultaneously enhancing environmental quality and maintaining social progress. A key characteristic of both of these circular economy initiatives is to design out, reuse or minimise the generation of waste.

By definition, the mining sector is represented by linear rather than circular activities through its supply of resources to society. However, being one of the world’s largest waste generators, the sector can adopt similar logic to that of the circular economy to improve its sustainability performance. Waste is a critical issue along the whole metals value chain, from mining waste to eventual end-of-life products such as scrap steel from construction and demolition waste

or the growing problem of electronic waste. While the mining industry has only made a limited contribution to the circular economy so far, the current market conditions, which are prompting calls for greater innovation, make the timing right for the industry to boost its contribution by utilising and generating value from mining waste or making it available as a feedstock from which other industries can harness value.

Mining in the circular economyEach waste stream along the metal value chain has its own set of environmental issues. For example, the concerns around tailings dams differ from those related to electronic waste. The opportunity to create value and reduce environmental liability from waste streams along the value chain is potentially one way that the mining and metals industry could make substantial contributions to the circular economy and, in doing so, improve sustainable development.

The circular economy (along with other related sustainability concepts) provides a system perspective of waste elimination through the rethinking and redesign of products and processes along the value chain and between supplier networks. One approach to accelerate the uptake of the circular economy is by introducing new innovative business models that deeply embed its principles into the way that companies generate and capture economic value (Table 1). Circular business models are disruptive, innovative business models aiming to drive the sustainability of the whole business network (system) through circularity (Forum for the Future, 2016).

In many cases, the most challenging (and massive) waste stream within the

Features this issue:Reducing Energy, Water and Waste

■■ The contribution of mining to the emerging circular economy

■■ Can renewable energy lower your cost of production?

■■ Waste not, want not – rethinking the tailings and mine waste issue

Gold

■■ Can the gold industry avoid the sins of the past?

■■ The Australian and New Zealand gold industry – going all in

■■ Costerfield – a narrow-vein case study

Working with Communities

■■ Challenges in obtaining a social licence to mine

■■ Local level agreement making

Mine Site and Project Management

■■ Building and maintaining effective project teams

■■ Corporate memory

■■ Organic management structure – its advantages in a mining consultancy

Industry Focus

■■ Trigger action response plans for diesel exhaust exposures

■■ Challenging the norm - innovate to differentiate

■■ Detonators – best-for-project practices in drill and blast

The contribution of mining to the emerging circular economyThe mining industry should embrace the circular economy to improve its sustainability and create value

A Golev, Post-Doctoral Fellow; E Lebre, PhD Candidate; and G Corder, Principal Research Fellow, Sustainable Minerals Institute, The University of Queensland

Feature - Reducing Energy, Water and Waste

metals supply chain is upstream (ie mining waste). Due to significantly lower grades for most extracted minerals and metals, tailings can account for up to 99 per cent of crushed and ground ores (Edraki et al, 2014). In addition, there is also a ‘hidden’ unaccounted flow of waste rock and overburden (Mudd, 2010).

Different strategies for managing mining waste can be characterised in terms of their ability to decrease the risks and consequences of environmental legacy and in generating economic value out of waste. An example of such characterisation is presented in Figure 1, which is based on multiple sources of information including, but not limited to, Edraki et al (2014), Franks et al (2011) and McLellan et al (2009).

An integrated, multidisciplinary approach to mining and metal waste is needed. Without such an approach, it will not be possible to account for the different social, economic and environmental dimensions of sustainability, engage with the network of actors within the metal supply chain and look beyond short-term economic benefits and risk-averse behaviour to target the supply of restorative and regenerative resources in a circular economy model.

Applying the circular economy to the sustainable mining challenge The key tenets of the circular economy are utilising resources efficiently, limiting final waste disposal and reducing losses of valuable material. There are various opportunities to implement circular flows

at the mine site level, which would result in enhancing mineral extraction, reducing mineral losses to mining waste and mitigating some of the environmental impacts related to mine waste disposal. In particular, acid and metalliferous drainage (AMD) occurs as a result of sulfide minerals remaining in mining waste because of inefficiencies in the extractive process. Recovering these minerals or stockpiling mineralised waste material in a way that enables future recovery while controlling leakage may contribute to an improvement in the site’s environmental health and result in economic gain. Making the most of the waste material and the minerals within it contributes to enhancing the overall resource extraction at a mine site. As a result, this would reduce the need for new mines to some degree.

Research work at the Sustainable Minerals Institute at The University of Queensland has produced a framework that allows a mine site’s performance to be assessed with regards to the circular flow of minerals. This framework has two sections: 1. the first establishes a set of material flow indicators (MFIs) – such as Mineral Losses to New Waste, Total Mineral Losses to Waste, Extraction Inefficiency and Circularity – that are relevant to a

mine project during operation2. the second examines the mine’s entire life cycle on a more qualitative basis.

Distinguishing these two dimensions is relevant as there can be more than one mining project over a mine’s entire life. A vast majority of mining projects close or cease operations before the mineral resource is exhausted, often without any planning for future use of the remaining mineralised material (Laurence, 2011). Observing the mine’s entire life cycle allows for a better understanding of the consequences on mineral losses due to operating interruptions. This qualitative and holistic perspective also provides the opportunity to investigate alternatives in business models.

The history of the Mount Morgan mine site in Central Queensland is characterised by three distinct mining projects. While the initial operations focused on mining the orebody, the two latest projects are dedicated to mine waste reprocessing. Results from the aforementioned framework indicated that the previous project for reprocessing mining waste did not make a significant positive contribution to the site’s environmental state. However, the current proposed project is much more promising, highlighting significant differences in the extractive strategies of

An integrated, multidisciplinary approach to mining and metal waste is needed.

Reducing Energy, Water and Waste


■■ smarter reverse logistics to provide cost-effective transportation of the higher economic value chain options (see Figure 1)■■ more innovative business models to

help create value from mining waste coupled with updated regulation that promotes greater resource utilisation.

To make a transformational change to managing mining waste, all of these factors need proper analysis to determine the most feasible pathways that both consider economic, technical, environmental and social factors and contribute to the circular economy.

AcknowledgementsThe authors would like to thank Carbine Resources, in particular Russell Dann and Patrick Walta, for their generous contribution to the Mount Morgan case study. The authors would also like to acknowledge the support of the Wealth from Waste Research Cluster, a collaborative program between CSIRO, the University of Technology, Sydney, The University of Queensland, Swinburne University of Technology, Monash University and the Center for Industrial Ecology at Yale University.

the two projects. By taking a life cycle perspective, it is possible to show that poor waste management, premature closure and inefficient extractive strategies can amplify mineral losses (either temporarily or permanently) through resource sterilisation and AMD.

The developed MFIs are a first step in quantifying the performance of a mining project regarding the sustainable management of its natural resource. The lack of long-term consideration for the whole life of the mine and the uncertainty of mining projects due to market conditions can significantly contribute to irreversible mineral losses. The identification of practices and strategies that anticipate the future use of material beyond the life of a mining project and/or contribute to making mining projects economically viable in the longer term (and consequently avoid interruptions) will assist in preventing these issues.

Future pathways to the circular economyFurther investigation and research to heighten the industry’s participation in the circular economy is necessary in certain key areas. Technical solutions for reuse are a key area, and there has already been significant work in this area. For instance, bauxite residue (or red mud) utilisation has been actively investigated for more than a decade (Paramguru, Rath and Misra, 2004). Research is still required on new and emerging technologies. Other critical areas that need addressing include: ■■ the potential reduction in

environmental liability and legacy issues from mining waste reuse■■ the resulting feasible community

benefits due to lower environmental risks■■ the opportunity for local enterprise

development from mining waste utilisation

ReferencesEdraki M, Baumgartl T, Manlapig E, Bradshaw D, Franks D M and Moran C J, 2014. Designing mine tailings for better environmental, social and economic outcomes: a review of alternative approaches, Journal of Cleaner Production, 84:411-420.

Forum for the Future, 2016. Circular economy business model toolkit [online]. Available from: www.forumforthefuture.org/project/circular-economy-business-model-toolkit/overview

Franks D M, Boger D V, Côte C M and Mulligan D R, 2011. Sustainable development principles for the disposal of mining and mineral processing wastes, Resources Policy, 36:114-122.

Laurence D, 2011, Establishing a sustainable mining operation: an overview, Journal of Cleaner Production, 19:278-284.

McLellan B C, Corder G D, Giurco D and Green S, 2009. Incorporating sustainable development in the design of mineral processing operations – review and analysis of current approaches, Journal of Cleaner Production, 17:1414-1425.

Mudd G M, 2010. The environmental sustainability of mining in Australia: key mega-trends and looming constraints, Resources Policy, 35:98-115.

Paramguru R K, Rath P C and Misra V N, 2004. Trends in red mud utilization – a review, Mineral Processing and Extractive Metallurgy Review, 26:1-29.

Figure 1. Value chain options for mine waste.

negative

Contaminated waste

Benign waste

Mine backfill

Reuse for construction

Engineered soil materials

Stockpiled for (future) reprocessing

(By)product recovery

positiveENVIRONMENTAL LEGACY

ECO

NO

MIC

VAL

UE

high

low/negative

Upcycling

Downcycling



Table 1. Business models for a circular ecomony

MODEL DESCRIPTION UPSTREAM MINING-RELATED EXAMPLES

DOWNSTREAM EXAMPLES

Closed-loop recycling

Retain materials and its quality for multiple cycles of use-recycling

Waste lubricants recycling; mining equipment refurbishment and recycling

HP’s cartridge recycling program

Downcycling

Alternative area and/or form of use, lower value, loss for future recovery, savings on landfill

The use of mine waste for backfilling

Nike’s ‘Reuse a shoe’ (recycling into rubber for playgrounds)

UpcyclingTurning material into new product of higher value and/or quality

Metal (and by-product) recovery from waste rock and tailings; reuse as a soil additive and for road construction

Worn Again (textile recycling); REDcycle (plastic bags and packaging recycling)

Industrial symbiosisWaste and by-product exchanges, sharing of services and utilities

Alternative raw materials for cement production

Timberland Tires (old tyres for shoes)

Collection servicesCollection of old or new products (for further recycling elsewhere)

Old tyres collectionTeracycle (multiple collection programs); Nespresso’s coffee capsules collection

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Stillacceptingabstracts

Met Plant 2017-E1+_X 7/11/2016 2:49 pm Page 1

The ongoing downturn in most commodity prices has led many companies to actively seek out opportunities to lower their

cost of production to remain profitable. While many cost-cutting avenues have been thoroughly explored and implemented, the potential for reduced energy costs through the integration of solar photovoltaic (PV) is often either overlooked or put in the too-hard basket.

The resources sector consumes 11.4 per cent (28.2 TWh) of all electricity in Australia (Department of Industry, Innovation and Science, 2015), with

approximately 45 per cent (12.4 TWh) of that consumed off-grid. The sector’s energy consumption increased by 75 per cent over the past decade due to its remarkable growth, the growth of more energy-intensive subsectors such as iron ore and coal and the mining of lower-grade ores, which are more energy intensive and complex to process.

The cost of electricity in the mining sector has doubled over the same period (Department of Industry and Science, 2015), so it comes as no surprise that electricity costs make up a much larger proportion of a mine’s operating input

costs than in the past. Electricity supply costs have an even greater impact at remote, off-grid operations, where already high energy costs are expected to increase over time.

Despite the high levels of electricity consumption in the sector, the uptake of renewable energy lags significantly behind the rest of Australia, with approximately one per cent renewable generation (Bureau of Resources and Energy Economics, 2013) versus 14.6 per cent for Australia as a whole (Clean Energy Council, 2015). This underrepresentation of renewable energy in the sector is in stark contrast to the availability of renewable resources, particularly solar, with northern and Western Australia enjoying some of the best solar resources in the world (Figure 1). Although not as universally available as the solar resource in Australia, there are numerous sites with reliable wind resources where the installation of wind turbines may also have great potential.

Solar PV costs have fallen considerably over the last decade and continue to fall. Internationally, this has been driven by a reduction in equipment manufacturing costs and, more recently, a reduction in margins due to oversupply in some markets. Costs are continuing to fall in Australia as capability and experience within the local industry grows. This has in part been driven by the government support for renewables, particularly the Australian Renewable Energy Agency (ARENA), which has funded numerous off-grid renewable energy projects and had a marked impact on activity within the large-scale solar PV sector as a result of the large-scale solar funding round (awarded September 2016).

Can renewable energy lower your cost of production?Renewable energy solutions are becoming more viable for mining operations and have the potential to reduce costs

Craig Bearsley, Associate Director - Energy, AECOM

Figure 1. Location of Australian mine and processing facilities in relation to solar resource. Sources: AECOM, Geoscience Australia, Australian Bureau of Meteorology.

Operating processing plant 12-14 MJ/m2

Proposed mine / processing plant 15-17 MJ/m2

21-24 MJ/m2

Operating mine 18-20 MJ/m2

>24 MJ/m2



The successful completion of demonstration projects such as the 10.6 MW DeGrussa mine solar project in Western Australia have played an important role in closing many of the previous knowledge gaps. These projects provide a valuable benchmark for the real cost of reliable, robust, remote, high-penetration solar systems.

The business case for solar While mature renewable energy technologies such as wind or solar PV are already competitive with traditional fossil fuel generation in grid-connected applications, they are currently only competitive in off-grid applications at low levels of renewable penetration (ie less than 40 per cent instantaneous penetration). Although generally not cost-competitive today, high-penetration

off-grid renewable generation systems utilising enabling technologies such as batteries are certainly technically feasible. These systems are expected to become cost competitive in the near future, with battery costs forecast to fall significantly due to the rapid expansion of the battery industry (eg electric vehicles) and improved economies of scale.

When including the federal government’s $0.40/L fuel tax credit, long-term contracting and the buying power of a large mining company, most large mine sites are likely to be paying in the vicinity of $0.80 to $1.00/L for diesel fuel, while communities can pay up to $1.70/L or more for diesel. This equates to $210-$260/MWh for diesel for larger mines and up to $450/MWh for communities and smaller industrial loads (depending upon the efficiency of the diesel unit). In contrast, the levelised cost of energy (LCOE) of a medium-sized solar PV plant in a remote location such as the Pilbara is approximately $160-$200/MWh (without grants or rebates). In addition, the project is able to generate large-scale generation certificates (LGCs), which currently have a market value of over $80/MWh. Therefore, for low penetrations of solar PV, there is a genuine business case for utilising solar PV to offset diesel.

Low-penetration renewable (approximately 10-40 per cent peak instantaneous contribution) hybrid energy projects are usually the most financially attractive because they do not require expensive enabling technologies such as battery storage. However, they may also be considered too small to make a significant difference to the overall site fuel usage.

As the penetration of renewable energy increases, additional enabling technology must be used to ensure the stability of the electricity system. These include communication and controls, energy storage (ie batteries or fly wheels) and load management technologies, which significantly increase the cost of the hybrid renewable project. In addition, the limited experience in Australia of

high-penetration enabling technologies typically dictates further cost premiums from the construction contractors and financiers.

With falling renewable technology costs and the resource sector’s sustained focus on cost savings and energy security, hybrid renewable power systems are becoming an increasingly attractive proposition. Renewables are widely recognised as a viable means to reducing energy costs while lessening exposure to

Levelised cost of energy (LCOE)LCOE is one of the primary metrics for measuring the cost of electricity produced by a generator. It is calculated by accounting for all of a generating plant’s expected lifetime costs (land acquisition, construction, financing, fuel, maintenance, taxes, insurance, overheads etc), which are then divided by the generator’s lifetime expected power output (MWh). Future costs are discounted to net present value terms.

LCOE allows us to make a meaningful comparison between renewable power systems such as solar PV, which have high capital costs but no marginal costs (no fuel or variable maintenance cost), and traditional generators such as diesel generation, which have a comparatively low upfront capital cost but high marginal costs (fuel and maintenance).

If the LCOE for a renewable technology is lower than the fuel cost (marginal cost) associated with the current power generation, renewable integration is a viable option to lower a facility’s overall operating costs.

The DeGrussa solar project The 10.6 MW solar power station constructed at Sandfire Resource’s DeGrussa gold and copper mine was successfully commissioned in May 2016. The solar plant is fully integrated with the existing 19 MW diesel-fired power station, using a 6 MWp (1.8 MWh) lithium-ion battery facility to manage spinning reserve and solar intermittency.

The project is expected to offset approximately five million litres of diesel fuel per annum (approximately 20 per cent of fuel for power generation) and reduce CO

2 emissions by an estimated 12 000 t/a.

The ARENA-funded project serves as an important demonstration of the potential for high-penetration renewable energy technology in remote mining applications. It will provide important cost and operational performance data to assist mining companies evaluate the risks and benefits of similar plants.

Although it is not generally economic to deploy high-penetration off-grid solar PV in Australia without subsidies, the project serves to demonstrate the robustness of the technology while retaining power quality and reliability in off-grid mining applications. It will also strengthen the case for low-penetration solar PV systems that are less complex to integrate and, in many cases, financially viable right now.

Image credit: Sandfire Resources (www.sandfire.com.au/operations/degrussa/solar-power-project.html)

Despite the high levels of electricity consumption in the sector, the uptake of renewable energy lags significantly behind the rest of Australia.



future fuel and LGC price risk (escalation and volatility).

All sites will have different characteristics that will influence the business case for hybrid renewable systems, particularly the site’s delivered cost of fuel. The higher the cost of fuel, the greater the potential to save money by integrating renewable energy.

Figure 2 provides a comparison of the typical cost of energy from diesel and solar PV generation, assuming that all existing diesel generation assets would remain on-site to provide adequate reliability. As such, it is a comparison between the marginal cost of diesel and the full LCOE for solar PV. It shows that the cost of solar PV has dropped dramatically (particularly between 2008 and 2012) and that it became competitive with the operating cost of diesel generation in recent years without subsidies. However, it should be noted that both diesel and solar PV system

costs vary substantially from site to site.One of the greatest challenges facing

off-grid industrial renewable projects is uncertainty regarding project life. In particular, mines with a forecast short lifespan limit the cost savings that can be achieved by renewables and the effective LCOE is increased. For a particular project example, Figure 3 illustrates the influence and interaction of the three key investment drivers: mine life, diesel cost and solar installation cost. In this example, if the project is in one of the orange areas of the graph, there is a business case for the integration of renewable energy because the LCOE of renewable energy is lower than the marginal cost of diesel generation. While projects in the grey area of the graph are unlikely to cost-effectively integrate renewable energy, they may still seek to invest in renewable integration to provide a hedge against fuel price volatility.

It is important to note that the capital cost of off-grid solar PV can vary greatly from site to site as it is impacted by the location, site conditions, access to labour, construction materials and other site-specific opportunities and constraints.

Challenges and opportunitiesRenewables offer a reliable alternative to traditional generation in off-grid applications and the potential for significant energy cost savings. However, renewable energy projects face a number of early-mover costs and barriers due to the small number of projects, both globally and in Australia, to draw knowledge, experience and confidence from. Table 1 outlines some of these challenges and opportunities in the current market.

Key technical considerations

Will the integration of renewables such as solar PV or wind at your site lower your cost of production, and what size should it be? Unfortunately, there is no simple answer to this question as there are a number of technical and commercial considerations to be addressed when conceptualising, developing and delivering a remote renewable hybrid project.

Before attempting to assess the feasibility of an off-grid renewable energy project, it is important to understand the capabilities and limitations of the existing electrical system and the site constraints.

Key inputs include: ■■ Detailed load data across the electrical

system is critical. This may require additional power monitoring to be installed in strategic locations within the distribution network. ■■ Network configuration and

parameters, including voltage, frequency and fault currents. ■■ Existing diesel plant performance data,

ideally including at least 12 months of high-resolution (one-minute interval) generation output data.■■ Renewable resource data may be

sourced from publicly and/or commercially available datasets for the feasibility studies, but should be substantiated with site monitoring data prior to any investment decision. ■■ Financial information, including

operation and maintenance costs for the existing power station and network,

Figure 2. Solar photovoltaic cost comparison with diesel fuel-only costs. Source: AECOM (includes Fuel Tax Credit, excludes large consumer buying power, assumes low-penetration solar systems).

2005

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02009

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Figure 3. Break-point analysis of the cost of solar photovoltaic (PV) with diesel generation as a function of PV capital costs. Source: AECOM.

20 18 14 10 416 12 8 26

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Consider high-penetration solar

Consider low-penetration solar(Diesel marginal cost > Solar LCOE)

Continue using diesel(Diesel marginal cost < Solar LCOE)



ConclusionRenewables are no longer a new or expensive technology, and in Australia they are now proven as both robust and reliable, with operating examples in remote, off-grid locations. Now more than ever before, renewables are becoming a viable option to reduce mine operating costs.

In addition, ARENA continues to provide grant funding to support the deployment of renewables and the generation of knowledge within the resources sector.

There are undoubtedly additional challenges to integrating renewables in remote mining environments. However, in our experience, these challenges are not insurmountable, nor do they necessarily detract from the fundamental and compelling business case for renewables.

information on electricity tariffs and equipment costs. ■■ Site characteristics, including

topography, geotechnical conditions, environmental features, surroundings and potential shading elements and available land area and rooftops.

Once data has been reviewed, verified and summarised, an iterative optimisation process will generally be required to define a suitable concept design. During the feasibility study, optimisation tools such as HOMER and ASIM can be used. Some companies have also developed their own proprietary optimisation tools (such as ABB’s remote optimisation model or AECOM’s CleanOpt tool).

During the subsequent design studies, network modelling software analyses load flow and system stability. These software packages are not optimisation tools; they are used to confirm the ability of pre-defined concepts to meet certain standards or requirements. Having a complete and thorough understanding of the impacts that a project is going to have on the electricity network is a key activity in the design of off-grid renewable energy systems.

ReferencesBureau of Resources and Energy Economics, 2013. Beyond the NEM and the SWIS: 2011-12 regional and remote electricity in Australia [online], Australian Government. Available from: www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/rare/bree-regional-and-remote-electricity-201310.pdf

Clean Energy Council, 2015. Clean energy Australia: report 2015 [online]. Available from: www.cleanenergycouncil.org.au/dam/cec/policy-and-advocacy/reports/2016/clean-energy-australia-report-2015.pdf

Department of Industry, Innovation and Science, 2015. Energy in Australia [online], Australian Government. Available from: www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/energy-in-aust/Energy-in-Australia-2015.pdf

Department of Industry and Science, 2015. End-use energy intensity in Australia [online], Australian Government. Available from: www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/energy-intensity/EndUseEnergyIntensityInAustralia.pdf

Table 1. Challenges and opportunities for renewable energy projects.

CHALLENGES OPPORTUNITIES

Intermittency and reliability concerns

Mines and processing facilities require exceptionally high levels of reliability. An electricity outage can result in millions of dollars in lost revenue and be exacerbated by the subsequent delay and effort required to restart processing and ramp up to full capacity.

Solar photovoltaic (PV) and wind generation are intermittent by nature, and there remains a general lack of confidence in the mining industry that renewable energy can be integrated reliably into their generation systems.

Renewables are typically used to offset fuel usage rather than to replace existing generation capacity in the system. As such, hybrid renewable systems can be designed to meet project reliability requirements.

At low levels of penetration, intermittent renewable ramping will remain within the load-following capability (spinning reserve) of the diesel units. At higher levels of penetration, short-term intermittency can be addressed by the use of energy storage (eg batteries) to provide additional spinning reserve.

Additionally, solar PV inverters can further improve the overall power system performance by providing power factor correction, which is a service that the inverters can even provide at night.

Misaligned incentives

There are a number of different commercial models for remote-site power supply. Some of these models, such as capacity agreements or take-or-pay agreements, mean that there is no incentive to invest in renewables as the cost savings associated with fuel savings would not be fully realised.

Where the parties have a close commercial relationship, there may be opportunities to agree on contractual terms, which represent a win-win situation.

Short project timeframes

Renewable energy projects, which are comparably capital intensive, rely upon reasonably long operating lifetimes (typically five to eight years or more) to be cost competitive. In contrast, certain mining projects may only have short remaining life duration or have an uncertain lifetime.

Solar PV and wind systems typically have a 20-25 year design life and are inherently modular. These systems can be designed to accommodate relocation, allowing them to be moved to another site at the end of the mine operations.

Technology maturity/cost uncertainty

While grid-connected wind and solar PV are mature technologies, off-grid projects are still perceived as high risk, which may increase financial costs and dissuade businesses from pursuing these opportunities.

The off-grid renewable sector in Australia has progressed significantly in the last few years, as demonstrated by the recent completion of the 10.6 MW DeGrussa solar project and a number of smaller projects in remote communities and mine sites. The growing database of cost and performance data from these projects (made available through ARENA) provides valuable evidence to support business case development and address misconceptions of large-scale off-grid renewable systems.

Now more than ever before, renewables are becoming a viable option to reduce mine operating costs.



Project, which involves large-scale tailings hydraulicking and reprocessing of gold tailings in the Johannesburg area of South Africa. The project was established in the 1980s and has gone through multiple renewals. After removing the tailings and recovering gold and uranium, the land is made available for housing developments. The remaining tailings are deposited in a consolidated tailings facility south of the city.

Another recent example of land reuse is Peabody Coal’s Ereen coal mine reclamation in Mongolia, in which a large portion of the reclaimed land was turned into hay paddocks that the local herding community can harvest for their own herds or sell for income. Local herders also serve as environmental monitors, providing them with an additional income stream (The Asia Foundation, 2009).

In another major project being undertaken in Kimberley, South Africa, De Beers is processing tailings from its now-closed local diamond operations. Its tailings plant is producing 800 000 carats of diamonds a year. However, this project is not without challenges as illegal mining is common. The company reports illegal miners caught on their land to the police, but that has not stopped the problem because many local people believe that De Beers is done with mining and the land where the tailings are stored belongs to the town, not the company.

Where longer-term care and maintenance is required, upskilling of local residents to carry out environmental monitoring and maintenance work is an obvious source of ongoing income, particularly for mines located in remote rural areas of developing countries where such income may make a significant

Over the past 15 years, the mining industry has begun to incorporate the concepts of sustainable development

and sustainable mining practice across the life cycle of mineral operations. This requires addressing economic issues and community impacts and concerns, as well as environmental protection, and is captured in part by the phrase ‘design for sustainability’ (McClellan et al, 2009). Over the same period, the industry has seen a gradual decrease in ore grades for many mineral commodities. As a result, large volumes of tailings and mine waste rock are being produced around the world, and it is expected that the annual production volumes of these materials will increase, even if there is not a significant change in the demand for materials.

Another related thread of change has been the realisation that societies need to move away from linear economies (raw materials, production, consumption and disposal) toward more circular ones. This will help societies become more resource efficient, which is defined by the United Nations Environment Program (2011) as reducing the total environmental impact of the production and consumption of goods and services, from raw material extraction to final use and disposal. The goal is to create ‘more with less’ and deliver greater value with less input. Circular economies require thinking in terms of the waste hierarchy (reduce, reuse, repurpose, recycle, recover, landfill). The challenge is that the waste hierarchy was originally designed to address embodied mineral content in products, rather than mine waste and tailings generation. It will need to be

reconsidered in a mine life cycle context, focusing on a value-based conception of waste (Van Ewijk and Stegemann, 2016).

In parallel with these changes, it has remained an imperative in the mining industry to dispose of waste materials as economically as possible while protecting the environment. Single handling of these materials has been the main target, which reduces the life cycle costs of their management but may make reuse of waste and tailings technically more difficult or economically infeasible.

This article explores a rethinking of the large-volume earthen material waste issue at mines. The underlying theme is that some or all of these materials can be resources for the future that potentially have value and so can positively contribute to sustainable development. These resources can:■■ offer economic gains to firms,

communities and societies ■■ contribute to environmental wellbeing ■■ enhance social interactions with the

previously mined landscape ■■ reduce governance commitments if

proper policies are put in place. Each of these topics will be briefly

explored. This will be followed by a discussion of approaches to manage design and operations to allow for future resource recovery.

Economic gainsMagnus Ericsson from the Luleå University of Technology has reported that there are currently approximately 75 major tailings re-mining projects globally. Minerals such as gold, diamonds and copper are being reclaimed. One of the most successful economic projects in using tailings as a resource is the Ergo

Waste not, want not – rethinking the tailings and mine waste issue An exploration of ideas that could help make the reuse of waste and tailings more economically viable

Dirk van Zyl, University of British Columbia; Deborah Shields, Colorado State University and Politecnico di Torino; Zach Agioutantis, University of Kentucky; and Susan Joyce, On Common Ground Consultants Inc



contribution to families and communities. In a clear example of ‘shared value creation’, this type of arrangement is more cost-effective than the complicated travel and logistical arrangements required to send outsiders to the site for monitoring, while contributing income and increased capacity to the local community. In this context, shared value means aligning the business interests of extractives companies with community needs and priorities.

It takes time and energy to set up the governance mechanisms so that these arrangements are consistent with local community norms and capacities, and to ensure that the new resources continue to be shared collectively.

Environmental well-beingThe design and construction of tailings containment structures is usually part of every major mining project. It is much

more effective to concentrate or clean the mined product close to the mining facility than transport it elsewhere.

In cases where mining does not require backfilling of stopes, storing tailings back in underground mine voids is a rather expensive exercise and is commonly avoided. However, following a number of tailings dam failures, mine planners have started considering the idea of underground permanent storage. Alternatively, contemporary mining facility designs provide post-mining land uses of tailings impoundments as these are mandated by environmental legislation and permitting procedures in many parts of the world. For example, a

number of tailings impoundments in North America are being turned into solar farms. In addition, tailings ponds may be designed ex ante to have better environmental properties (Edraki et al, 2014), which can be accomplished by better management of the water, reagents and minerals remaining in the tailings. For example, sulfide flotation has been implemented for tailings to produce non-reacting products that will not produce acid or sulfates. This approach is also being investigated for a number of development projects.

However, very few designs view tailings impoundments as a potential resource. Recent research (Harrison, Power and

The goal is to create ‘more with less’ and deliver greater value with less input.



management or economic opportunities as ‘debundling’ from large, technologically complex and high-capex designs provides more opportunities for national or local businesses to play a role.

Social interactions with the landscapeIt is common to construct mine waste facilities as geometric forms that do not necessarily approximate features in the natural environment. Landform engineering is an important aspect of the mine closure and reclamation process. Landscape architectural planning during the early stages of mine planning can also be implemented. Large flat areas on the top of mine waste facilities may be used as future agricultural lands, an activity currently being developed in China. Conversely, where potential future land use is not a pressing need, community members may prefer a landscape that has a more natural form. To the degree that (non-liquid) waste and tailings piles are given shapes that are inconsistent with natural land forms (ie too many angles and flat tops and not enough curvature and randomness), they may be considered unattractive.

In either case, an important aspect of achieving a design that contributes to social well-being is the early engagement

of communities to understand their expectations of the mine landscape during and following operations. This implies an early engagement process, but relationships to the landscape are not necessarily unchanging, nor are social needs or values. Engagement should be ongoing and agreements revisited on a periodic basis as new opportunities may develop or the local peoples’ needs or expectations of post-mine land use may change over time. This has been seen in community agreements that were supposed to serve for the full mine-life of a more than 20-year operation, yet as employment, educational levels and generational changes advance, new agreements are needed to reflect the

changing needs and aspirations of the parties. Early impact and benefit agreements in Canada did not include consideration of the need to update agreements, but second-generation agreements today tend to be negotiated as ‘living documents’.

Mine waste facilities can be long-term regulatory and corporate liabilities if they produce contaminated effluents. Acid rock drainage and metal leaching is a major problem at many mine sites and may be difficult, or even impossible, to control once started. However, these facilities may still be a resource for the recovery of metals. Further technology development may allow for the future recovery of low-concentration metals from the effluent.

Mine waste governanceOngoing monitoring of mine waste facilities during the post-closure period may provide employment to local communities. Ideally, these sites should be relinquished from operator to original landowner or new institution after satisfactory completion of closure activities, thereby reducing governance commitments. However, sufficient regulatory oversight should be exercised to identify potential future site disturbances for the recovery of metals or other perceived resources.

There are several governance implications from the community and civil society side. First, in many developing countries, there is little or no regulatory requirement or oversight of the closure process for operations and even less so for exploration. As a result, assuming a meaningful/credible regulatory role may not be appropriate at this stage. However, progress is being made in many jurisdictions in this regard, and it is expected that pressure from communities, as well as from financial institutions in accordance with the Equator Principles, will influence more uniform international approaches.

Problems may still be posed when there are ongoing environmental liabilities associated with a project. In this case, longer-term bonding may be needed as a long-term or perpetual care site cannot be considered closed or the liability relinquished. The governance commitments from

Dipple, 2012) shows that some tailings (ultramafic) can be used effectively in the sequestration of carbon by converting CO2 to carbonate minerals.

Another technology that is being investigated on a worldwide scale is geopolymerisation. Under this process, a ‘paste’ can be created through a relatively simple chemical reaction. Depending on the components present, the paste can be designed to ‘bond’ with different waste streams, such as mine tailings. This process can transform tailings into a new supply of raw materials for infrastructure construction, including roads and highways (Ahmari, Chen and Zhang, 2012) and even commercial buildings (Ahmari and Zhang, 2012).

Natural Resources Canada has a green mining initiative that ‘targets the development of innovative energy-efficient technologies required for mining to leave behind only clean water, rehabilitated landscapes and healthy ecosystems’ (Natural Resources Canada, 2016). Recent publications (Tisch et al, 2012, 2015) present the results of studies on biomass production on closed tailings facilities for green energy production.

Environmental accidents are usually the result of the alignment of several adverse scenarios. Statistically speaking, there is always a probability that an

accident will occur. The failure of the Fundão tailings dam at the Samarco mine in Brazil is a recent example of how the cumulative effects of multiple small design and construction flaws, combined with operating decisions, can lead to an environmental and social disaster (Morgenstern et al, 2016). As such, an environmentally friendly tailings facility could be designed as a group of smaller facilities with multiple end uses that can diversify potential impacts, reducing the risk profile both for the operation and for other stakeholders, including local communities.

The concept of redesigning for smaller, multiple facilities also opens potential new opportunities for post-mining

Engagement should be ongoing and agreements revisited on a periodic basis as new opportunities may develop.


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mining companies must also be robust for sites that require ongoing monitoring, maintenance and operations (such as water treatment plants).

A local institution to receive funding, manage the oversight role and pay local monitors can be an intermediary strategy for transferring economic opportunities to the local area when there is poor government oversight and a lack of capacity in the local community. This could be an existing institution, or a foundation could be set up with ongoing funding that pays for environmental management of a site while providing ongoing seed money for social development programs. These programs could improve local social stability and reduce the risks to the remediated areas that can stem from poverty and pressure on resources.

Management opportunitiesA range of options is available to manage project design, operations and closure to increase the opportunities for resource recovery. These options include:■■ Ongoing community engagement,

especially with respect to envisioning the future of the area.■■ Careful consideration of a wide range of

alternatives for all aspects of project development, including mining method, processing options, mine waste materials management options and site selection for mine waste facilities.■■ Complete characterisation of all

materials to identify the presence of specialty metals (eg rhenium in copper ore bodies), combined with a value-based conception of waste that estimates the resource value of the materials. This should be supplemented with a rethinking of the waste hierarchy in the context of mining and mineral processing so that there is not an automatic presumption of disposal. ■■ The EU is working to devise a new

mineral policy, the goal of which will be to incorporate both primary and secondary minerals in mineral supply/production policy. The challenge is that policy, law and regulation of mining in virtually all cases resides in separate legislation and ministries to waste management. If mine waste and tailings are to be redefined as sources of secondary materials, there will need to be coordination across government agencies to ensure that the rules within one domain do not conflict with rules in another.

ChallengesOperational and societal challenges remain, and more will be identified as the efforts of embracing the potential of mine waste as a resource intensifies. The first challenge is to agree on the stakeholders and their approach to identifying the data collection needs for a specific project, as well as identifying the entity that will be responsible for maintaining the site records. Corporate control of this may not be the optimal approach, but governments may not be in a position to be the custodians of it either.

■■ Life cycle planning for the project on an ongoing basis, combined with design for sustainability. For waste and tailings, this implies storage in a manner that will make reprocessing of waste and tailings more feasible, rather than less. This may potentially conflict with the goal of minimising the surface footprint of waste. ■■ To identify best-fit, post-closure uses

and align design, management and closure activities, work should be done early in the project cycle to identify economically useful and desired scenarios after closure, with input from stakeholders. ■■ Increasingly, dialogue and early-stage

agreements are being used to address the concerns of local populations and to set up agreements to protect key social and environmental values. For effective planning, the economic use after closure should become part of the prior agreements with communities that can contribute to overall project acceptability. ■■ The challenge of developing

participatory mechanisms to ensure that the input of local populations is representative and includes the people who are most concerned with and effected by the impact. ■■ Post-mining land use is an important

aspect of mine planning. It is possible that specific plans for future site uses are developed with community support and that the project is sold to another company. While the future site use plans can be transferred, the new owner may consider ongoing resource recovery from the mine waste or new orebodies as the preferred site option. This will put the new owner’s expectations in direct conflict with the carefully assembled future land use plans, and the new owner will have to work closely with the community to maintain its support as the plans develop. ■■ Careful record keeping of material

movement to waste rock and tailings facilities is essential to allow future identification of material locations. Without having good records of material locations, selective re-mining may not be possible. ■■ Complete, as-built plans should be

prepared during operations and closure to confirm the locations of all potential waste materials that must not be disturbed and the thickness of engineered covers etc. This information is essential for ongoing environmental protection if re-mining is done.

ReferencesAhmari S, Chen R and Zhang L, 2012. Utilization of mine tailings as road base material, in Proceedings GeoCongress 2012, pp 3654-3661.

Ahmari S and Zhang L, 2012. Production of eco-friendly bricks from copper mine tailings through geopolymerization, Construction and Building Materials, 29:323-331.

Asia Foundation, The, 2009. Land reclamation: a Mongolian citizen’s guide [online]. Available from: http://sgpmongolia.org/upload/Land%20reclamation.pdf

Edraki M, Baumgartl T, Manlapig E, Bradshaw D, Franks D and Moran C, 2014. Designing mine tailings for better environmental, social, and economic outcomes: a review of alternative approaches, Journal of Cleaner Production, 84:411-420.

Harrison A L, Power I M and Dipple G M, 2012. Accelerated carbonation of brucite in mine tailings for carbon sequestration, Environmental Science & Technology, 47(1): 126-134.

McClellan B, Corder G, Giurco D and Green S, 2009. Incorporating sustainable development in the design of mineral processing operations – review and analysis of current approaches, Journal of Cleaner Production, 17:1414-1425.

Morgenstern N, Vick S, Viotti C and Watts B, 2016. Report on the Immediate Causes of the Failure of the Fundão Dam. Fundão Tailings Dam Review Panel.

Natural Resources Canda, 2016. Green mining initiative [online]. Available from: www.nrcan.gc.ca/mining-materials/green-mining/8178

Tisch B, Beauchemin S, Clemente J and Zinck J, 2015. Innovations in tailings management: from risk to revenue, in Proceedings CIM Montreal 2015.

Tisch B, Hargreaves J, Beckett P, Lock A and Spiers G, 2012. Post-mining agriculture for biofuels on tailings: an overview of results from the Green Mines Green Energy (GMGE) initiative, in Proceedings ICARD Conference, Ottawa.

Van Ewijk S and Stegemann J, 2016. Limitations of the waste hierarchy for achieving absolute reductions in material throughput, Journal of Cleaner Production, 132:122-128.

United Nations Environment Project, 2011. Decoupling natural resource use and environmental impacts from economic growth, A Report of the Working Group on Decoupling to the International Resource Panel. Fischer-Kowalski M, Swilling M, von Weizsäcker EU, Ren Y, Moriguchi Y, Crane W, Krausmann F, Eisenmenger N, Giljum S, Hennicke P, Romero Lankao P, Siriban Manalang A, Sewerin S.



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Over the past few years, the gold industry has implemented some of the more painful restructuring in its history in

the face of a falling gold price. This has led to improved financial positions and returns for investors. But as the gold price is beginning to stabilise and fundamental economic factors are trending in the sector’s favour, there are red flags emerging that the industry needs to heed as it prepares for the upturn. Firstly, are the recent changes sustainable enough to avoid the same errors of the past from creeping in? Secondly, has our cost-cutting been too indiscriminate by underspending on capital to sustain future production in the industry?

Before I examine the current danger signals in greater detail, let me go back

over the past four years and analyse the fundamental changes the industry has experienced over that period. In mid-2012, the global gold industry was riding the wave of a gold price that was trading in a narrow band at record levels of around US$1800/oz. We were chasing production because we thought bigger was better and growing production was creating value.

But therein lay the problem. The industry was chasing growth at almost any cost. Executives, including at Gold Fields, were standing on podiums at investor conferences promising rising production. It was a message that the market was loving and encouraging. But few in the industry were bothered about whether production growth was actually profitable. That was the assumption, but the reality was different. While the gold

price was going up, our profit margins were not. The industry was not offering shareholders leverage to the gold price, and investors were gradually wising up to the fact.

Capital optimisation was another issue. What we saw at the time was a plethora of investments in projects that have still not been built today. Such projects include Pascua-Lama in Chile, Conga in Peru and Rosia Montana in Romania, though not all of these were stopped for economic reasons. Shareholders’ money was spent unwisely or balance sheets were leveraged to fund growth and acquisitions in the belief that they could be locked in for future returns. Finally, dividend payments by the industry were poor.

These trends are backed up by the

Can the gold industry avoid the sins of the past?The global gold industry faces a number of challenges now that the gold price is showing signs of recovery

Nick Holland, CEO, Gold Fields


Feature - Gold

statistical performance of the industry prior to 2012. Capex per ounce was going up by 32 per cent per year over ten years (on a compound annual basis) leading up to 2012. Merger and acquisition (M&A) spending was rising by 17 per cent per year (again on a compound annual basis) over the same period. But production targets were being missed on a regular basis by most gold producers. We at Gold Fields realised in mid-2012 that we had lost our way and that we needed to make changes. That proved prescient as in early 2013, the gold price started its long decline from levels of around US$1800/oz to just over US$1000/oz in December 2015. Investors quickly followed suit, with the bullion holdings of gold-focused Exchange Traded Funds almost halving from 85 Moz in 2013 to 47 Moz last year. And the value of the top nine gold funds slumped from US$24 billion to US$5 billion over the same period.

Amid the sharp fall in the gold price and the investor flight, the industry had no choice but to react, and react it did. We carried out an analysis of key production and financial metrics of 11 of the largest global gold mining companies for the period 2012-15. These 11 firms, which include Gold Fields, account for nearly a third of global gold production. The numbers from this analysis are revealing.

Financial metricsThe financial position of most gold miners has improved amid the drastic restructuring. The combined net cash flow of the industry’s 11 largest gold miners was negative US$4 billion in 2013. A year later, it had recovered to US$2 billion, and it improved further in 2015 to around US$5.8 billion. Similarly, the net cash flow margin for these producers recovered from negative eight per cent in 2013 to nearly 14 per cent in 2015. The improved cash flows have led to stronger balance sheets. The net debt for these mining companies hit a peak of US$29 billion in 2013, but had improved to around US$22 billion in 2015. This is still high, but is more manageable, with net debt to earnings before interest, taxes, depreciation and amortisation (EBITDA) sitting at a ratio of 1.45 in 2015 compared with 1.89 in 2014.

Shareholders have yet to experience the full benefit of the improved financial position. On a per share basis production, EBITDA and cash flow have gone backwards between 2012 and 2015, though some of the metrics have at least stabilised of late. What the overall deteriorating position reflects is both the sharp fall in the gold price and that these companies have issued additional shares to repair balance sheets. The industry has

always been a poor dividend payer, and this has gotten worse amid the decline in the gold price. Average dividend yields by the 11 miners ranged from 0.5-1 per cent in 2015, falling from a peak of around 1.8 per cent in 2012.

Cost metricsBy our calculations, all-in sustaining costs fell by 22 per cent over the period 2012-15, and all-in costs (AIC) fell by 36 per cent (AIC includes all capital and exploration expenditure). Both these cost metrics were the result of the industry, through the World Gold Council, deciding to provide more cost-inclusive measures (see the industry performance in Figure 1).

But much of the improvement in costs has come from factors outside of producers’ control. In the peer group of 11 companies, about 50-60 per cent of production is in so-called commodity currencies, namely the South African rand, the Australian dollar and the Canadian dollar. These have depreciated markedly between 2012 and the end of 2015 – 47 per cent in case of the rand, 26 per cent for the Australian dollar and 21 per cent for the Canadian dollar. So while the US dollar gold price has slumped over the past four years, gold revenues in these countries were cushioned by the

There are red flags emerging that the industry needs to heed as it prepares for the upturn.Photo by Bullion Vault.

Used under CC BY 2.0.

Figure 1. Industry all-in sustaining costs (AISC) and all-in costs (AIC) trends, 2012-15.

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weaker currencies. This currency weakness has a flipside to it, namely an eventual follow-on impact on future imported cost inflation for much of the mining industry’s equipment and other input materials.

Cost reduction has also been aided by the lower oil price over the past four years. In our estimates, oil accounts for between 10 and 15 per cent of operating costs for the mining sector, meaning that the lower price would have provided a significant tailwind. Record low interest rates have also significantly benefitted over-indebted companies.

But besides fat, it appears that the industry has also been cutting muscle. As a per cent of operating expenditure, stay-in-business (SIB) capital decreased from 46 per cent in 2012 on a per ounce basis to 26 per cent in 2015. This trend is of concern as it suggests that many companies have merely deferred capital that is going to have to be spent some time in the future.

To accurately understand the changes to costs that have come from external factors, as well as the unsustainable reduction in SIB capital, Gold Fields did a calculation on what the impact on costs would have been if all of the factors stayed the same. The result was that costs would have only declined by four per cent over

the period, falling from US$1115/oz in 2012 to US$1060/oz in 2015. This means that if the benevolent tailwinds that the industry has enjoyed reverse (higher oil prices and interest rates and the strengthening of currencies in operating countries), the current picture will not be so rosy and more fundamental restructuring may indeed become necessary.

Growth and exploration spendingPerhaps the most worrying trend we have witnessed over the past four years is the sharp drop in project capital and exploration expenditure by the industry, which is on top of the cutting of corners on SIB capital. Capital spending has been annihilated, both from the amount of money spent and from the decline in reserves being seen in the industry. The capital spending by the 11 companies studied (both project and SIB) decreased from US$20 billion in 2012 to US$7 billion in 2015. This is also reflected if those numbers are mapped onto the industry’s production (Figure 2).

Exploration spend has been halved to US$36/oz in 2015 from an already low US$78/oz in 2012. This is a big concern as we are not spending enough to sustain the industry into the future. It is inevitable that gold companies are going to get back

to judicious exploration in the near future, though this is likely to be in conjunction with some of the junior miners, who, unlike the majors, have stayed in the game over the past few years.

One of the reasons why there has been such a competitive dogfight for acquisitions of late is that some of the miners are trying to fill future gaps in their production profile that they are not managing to fill through brownfields exploration or organic growth. They are willing to pay an M&A premium to buy these ounces. There has already been a pick-up in M&A activity, with US$2.9 billion worth of deals done so far in 2016 compared with US$2.1 billion for the whole of 2015. With the gold price higher than it was last year, I expect a few more transactions before the end of 2016.

More concerning than the decline in exploration spending is the fact that the average reserve life of the 11 companies studied has fallen from 24 years to 17 years as a result of underspending and the lower gold price.

High-grading is also partly to blame, with the average head grade of the peer group higher than the reserve grade for the past three years. In 2015 alone, 52 per cent of production was mined at grades above the reserve grade, which indicates a deliberate bypassing of lower-grade ore. If and when the lower grade is mined, costs will be pushed up again.

As a result of these trends, the global gold industry may well be facing a ‘hiatus’ in output and may be close to hitting a peak in production. The supply shortage will be exacerbated by the fact that ‘above ground’ gold stocks, such as in central

Perhaps the most worrying trend we have witnessed over the past four years is the sharp drop in project capital and exploration expenditure.

Photo by Ken Teegardin. Used under CC BY 2.0.


Feature - Gold

bank vaults, look like they are not coming back to the market anytime soon. Indeed, the central banks of countries such as China and Russia are continuing to buy bullion as a counter to the US dollar. Investor demand is also looking strong, with a 127 per cent year-on-year increase in demand in the first half of 2016.

Future trendsWhile the higher gold price is to be welcomed, there is a case to be made that the industry has not completed cleaning up its act. As an industry, we have responded to the decline in the gold price over the past four years, but as Gold Fields’ research has indicated, without the

tailwinds of lower oil prices, low interest rates and weak commodity currencies, the gains would not have been that substantial.

These economic trends will not persist so we have to remain cost conscious despite the rise in the gold price this year. Our investors have indicated that they want us to show profit margin expansion as the gold price rises, which requires a continued focus on growth in cash rather than production ounces.

At the same time, we need to embrace innovation to cope with grades that are likely to be lower than those mined currently. Given the dearth in exploration, technology is also required to cope with the increasing complexity of mostly lower-grade orebodies.

Eventually, we also need to start reinvesting in exploration. But set against the likelihood that commodity currencies will start to strengthen against the US dollar, the incentive gold price for new reserve discovery and production is still above current trading levels of around US$1500/oz. We are not there yet.

Figure 2. Industry capital expenditure per ounce produced, 2012-2015. Source: Company reports.

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Gold is hot. Reported all-in sustaining costs (AISC) indicate that strong margins prevail for the vast majority of

Australian and New Zealand gold producers in 2016. The outlook for miners will continue to be positive if gold prices and exchange rates remain around present levels into 2017. However, in the longer term, significant challenges to the sustainability and longevity of the local gold industry exist, including the identification of new quality resources to facilitate timely ore reserve replacement.

Current state of the gold sectorPresently, the local gold mining sector is enjoying near-perfect market conditions, with high gold prices in Australian dollars, low fuel prices and few shortages in skilled labour. That is, while locally denominated

gold prices in 2016 are of the same order as those that prevailed in 2011-12, many of the cost-side pressures that squeezed operator margins at that time have since dissipated.

As at 30 June 2016, the Australian and New Zealand gold industry comprised approximately 60 mining operations primarily producing gold and a further nine sites where gold is produced as a by-product. These operations produced in excess of 2.35 Moz of gold in the June 2016 quarter, with the ten largest gold producers contributing over 50 per cent of this production with 1.21 Moz of gold. Breaking this production down by mine type for the quarter saw 52 per cent of the mines (1.12 Moz) source their ore from underground operations, 30 per cent from open pit (0.62 Moz) and 18 per cent from combined open pit and underground

sources (0.65 Moz). The five largest producing gold operations in order were Kalgoorlie, Boddington, Cadia Valley, Tanami and Telfer. Western Australia leads production, with 66.2 per cent of Australia/New Zealand production coming from the state. New Zealand contributes 2.5 per cent of the total gold produced. The other states in order of production levels are New South Wales, Northern Territory, Queensland, Victoria, South Australia and Tasmania.

Most mining companies have adopted the World Gold Council (2013) guidelines for reporting AISC since its introduction, now accounting for slightly over 75 per cent of the primary gold mines, which in turn comprise over 95 per cent of the primary gold production. The five lowest-cost AISC mines in order for the June quarter were Cadia Valley, Kanowna Belle, Tanami, Gwalia and Duketon North. The weighted average AISC (weighted by gold ounces produced) for the June quarter was A$1068/oz, with a quarterly spot gold price of A$1670/oz. Thus, healthy margins are being made throughout the sector on a per ounce basis. With the higher gold price, the partial hedging of future gold sales is again being used as a risk management mechanism to provide greater certainty to future revenue.

To be in the lowest cost quartile by production for the June quarter (for those gold mines that report an AISC), a mine needed an AISC of A$915/oz or less. The median AISC for that quarter was A$1070/oz, and an AISC of A$1257/oz or higher placed a mine in the highest cost quartile (Ulrich and Trench, 2016). The AISC cost curve for the June 2016 quarter is presented in Figure 1.

The average gold grade processed by all

Figure 1. Australian and New Zealand gold mines June 2016 quarter gold AISC cost curve. Ore mining source: OP = open pit, UG = underground and OP/UG = open pit and underground. Source: Ulrich and Trench (2016).

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Feature - Gold

The Australian and New Zealand gold industry – going all in An overview of the current state of the gold sector and the opportunities and challenges it faces

Sam Ulrich MAusIMM, Centre for Exploration Targeting (CET), The University of Western Australia and Allan Trench FAusIMM, CET and Business School, The University of Western Australia


the primary gold mines ranged from 0.79 g/t to 24.90 g/t, while it ranged from 0.79 g/t to 9.57 g/t for the mines that reported AISC.

As an industry, the gold grades processed at each mine are not indicative of whether the AISC for a given mine will be high or low. That is, higher gold grades do not correlate with lower AISC, and vice versa, across the portfolio of Australian and New Zealand mines (Figure 2). However, at the single mine scale, the gold grade that is processed from quarter to quarter is indeed reflected in the AISC over time, with higher grades leading to a lowering of AISC.

The mining sector mantra that ‘grade is king’ is therefore mine-specific in the case of gold as grade is a very poor predictor of cost performance when viewed across the industry as a whole. Other geological characteristics (including structure, geometry and mineralisation style) and engineering attributes (mining method and production scale) influence AISC in addition to ore grade.

Higher gold prices provide market

Figure 2. June 2016 quarter, average head/feed grade versus AISC for Australian and New Zealand gold mines. Data sourced from company quarterly reports.

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The outlook for miners will continue to be positive if gold prices and exchange rates remain around present levels into 2017.

Gold

Photo by Scott Beale/Laughing Squid. Used under CC BY 2.0.


opportunity and may facilitate production from smaller mines and lower-quality gold deposits, in some cases via toll treatment where there is existing mill capacity. Typically, such operations will reside in the higher cost quartiles of the AISC aggregate supply curve.

The shift to AISC reportingAISC reporting has superseded cash cost reporting and is now the dominant cost reporting structure used by companies with gold operations. While it provides greater transparency towards the real cost of mining, it still isn’t perfect and has some grey areas.

AISC can either be reported on a by-product or co-product basis: ■■ by-product AISC – revenues received

from the sale of by-products are deducted from operating expenses prior to calculating the cash costs for the primary metal■■ co-product AISC – the cost attributed to

the production of each metal is relative to its contribution to revenue.

This isn’t an issue for the majority of

‘vanilla’ gold mines, but it is a significant factor in the cost reporting for multi-commodity operations. For example, Cadia Valley (Au-Cu) is reported on a by-product basis and Boddington (Au-Cu) on a co-product basis. The publicly reported AISC for these two operations are therefore not directly comparable. Ideally, both methods should be made clear – so in this example Cadia Valley should also be reported on a co-product basis. It should be noted that Cadia Valley on a co-product basis would still be the lowest- or one of the lowest-cost producers, but would not then appear so far ahead of the other low-cost mines.

There is no strict definition as to when an operation should be reported on a co-product or by-product basis. One rule of thumb is that when the revenue from a secondary commodity exceeds ten per cent of total mine revenue, co-product costing should apply. However, the ten per cent figure is arbitrary and higher figures of 20 or even 30 per cent could also become the de facto standard in future. Perhaps a better definition would be for

co-product costing to be the principal reporting mechanism in cases where the additional commodity is considered sufficiently valuable as to impact on mine planning decisions over and above the sole production of gold.

The cost of in-mine and near-mine exploration is another grey area. That is, some drilling in the immediate mine environment will be classified as part of sustaining exploration capital, whereas other drilling may be deemed to be non-sustaining exploration capital rather than a mine cost. The mine-by-mine definition can affect the reported AISC, with some mines classifying a higher proportion of drilling as sustaining exploration capital than others. We understand that drilling into areas classified as Inferred Mineral Resources is one grey area where practice differs between operations.

Furthermore, minor variations can also exist between those companies reporting AISC using the total number of gold ounces produced in a period versus gold ounces sold in that period.

Photo by Loïc Lagarde. Used under CC BY 2.0.


Feature - Gold

With 50 per cent of Australia’s gold Ore Reserves held by four companies (BHP Billiton, Newcrest, Newmont and Barrick) in just four deposits, the sustainability and longevity of a few mines are very secure. However, much work remains to be done to both extend existing Ore Reserves and discover entirely new ore sources elsewhere.

Despite the Australian and New Zealand gold industry having endured for over 150 years, our understanding of the critical factors that link geological characteristics to gold mine economics

and cost competitiveness remains only basic. A stronger understanding in future of the ‘geo-economics’ of our gold mines will help prioritise exploration and development towards the higher-quality, as yet undiscovered resources and reserves that will underpin the industry’s next 150 years.

Learning from past mistakesThe larger local gold miners look to be learning from past industry challenges. For example, significant debt obligations have prompted portfolio adjustments amongst the global gold majors since 2011-12. Northern Star Resources and Evolution Mining have both combined acquisitions with organic growth through in-mine exploration programs. These companies and others have led an industry-wide focus on quality ounces over quantity in 2015-16.

For example, Evolution Mining’s acquisition of Cowal and subsequent near-mine exploration programs have delivered substantial additional ore reserves. While making acquisitions (including a gold production stream from the Ernest Henry copper-gold mine operated by Glencore), Evolution Mining has also adjusted its portfolio via the divestment of the Pajingo mine.

Northern Star Resources’ acquisitions of Jundee, Kundana and Kanowna Belle, combined with aggressive exploration, have delivered increased Mineral Resources and Ore Reserves that have extended the mine lives of these operations. At the same time, Northern Star has divested the higher-cost Plutonic mine.

Both mid-tier and global gold miners are taking the view that managing fewer, larger-producing mines avoids management expertise being spread too thinly across smaller assets within the portfolio and are targeting gains in production and improved costs.

Sustainability of the Australian and New Zealand gold industryThe long-term future and sustainability of the gold industry in a country is measured by its Economic Demonstrated Resources (EDR), which is an indicator of a country’s gold endowment. EDR in Australia is defined as the total gold in Proven and Probable Ore Reserves and most of Measured and Indicated Mineral Resources (Geoscience Australia, 2015). At the end of 2014, Australia had an accessible EDR of 9082 t (292 Moz) of gold, of which only 39 per cent (3550 t or 114 Moz) was classified as Ore Reserves (Geoscience Australia, 2015). Approximately 50 per cent of the gold in Ore Reserves is attributable to four deposits: Cadia Valley, Olympic Dam, Boddington and Kalgoorlie.

Australia has had a good track record in terms of EDR growth (Phillips, 2013; Phillips and Vearncombe, 2013), though this is less evident if exploration success is only measured by substantial greenfield discoveries (more than 1 Moz) over the same period. The number of discoveries is also affected by incremental Ore Reserve replacement, where an initial deposit discovery of 0.4 Moz over a number of years becomes a more than 1 Moz deposit.

Are we overstating the longevity of the local gold sector? If one takes the current Ore Reserves and divides it by the current

production rates of Australia and New Zealand’s gold operations, without any Ore Reserve replacement, approximately 15 operations are at risk of closure within two years and 30 could close in five years. The seriousness of this cannot be understated when looking at the time it takes for a new discovery to become a mine, which is typically in excess of five years. The gold sector therefore faces a challenge that is common to other mineral commodities in Australia to identify the ‘mines of tomorrow’ (Guj and Schodde, 2013).

Ore Reserve replacement is shaping as the biggest stay-in-business threat and longer-term sustainability challenge to the gold industry. With over half of the current operations sourcing ore from underground mines, this presents additional technical challenges. As the current gold operations go deeper, more open pit operations are transitioning to underground mining and many mines have current Ore Reserves representing only two to three years of future production. The cost of deep drilling from the surface soon becomes prohibitive, as does underground development for drill cuddies. Therefore, one sees only the regular incremental replacement of Ore Reserves being mined, with mines maintaining their two- to three-year mine life. It is rare to observe substantial increases in Ore Reserves that provide long-term certainty and sustainability for the sector, and hence mine life, without new discoveries.

The larger local gold miners look to be learning from past industry challenges.

ReferencesGeoscience Australia, 2015. Australia’s Identified Mineral Resources 2015 [online]. Available from: d28rz98at9flks.cloudfront.net/87839/87839_Identified_Minerals.pdf

Guj P and Schodde R, 2013. Where are Australia’s mines of tomorrow?, The AusIMM Bulletin, June 2013:76-82.

Phillips G N, 2013. Australian gold exploration – a quick audit (or how do we measure success?), The AusIMM Bulletin, August 2013:22-25.

Phillips G N and Vearncombe J, 2013. Australian gold exploration – following up the recent audit, The AusIMM Bulletin, October 2013:76.

Ulrich S and Trench A, 2016. June quarter 2016 Australia & NZ gold operations [online]. Available from: www.cet.edu.au/news-and-media/news/news-details/2016/09/02/ravensgate-cet-gold-operations-bulletin

World Gold Council, 2013. Publication of the World Gold Council’s Guidance Note on non-GAAP metrics - all-in sustaining costs and all-in costs [online]. Available from: www.gold.org/download/file/3180/guidance_on_all_in_costs_pr.pdf

Gold


for gold and US$6820/t for antimony).The operational challenges of narrow-

vein mining include controlling overbreak as the veins being mined are only 300 mm wide. Costerfield has developed methods and modified equipment to suit extraction of these veins. Productivity improvements have involved developing a stoping method and equipment to suit 1.8 m wide development drives. Over the last five years and during a skills shortage, recruitment, training and retention of personnel has been key to keeping corporate knowledge and retaining skills to execute a careful, efficient mining technique to minimise overbreak.

Additionally, specific management strategies ensure efficient production and conversion to reserves of the high-grade antimony and gold resource. These include: ■■ a focus on culture and company

values in leadership■■ developing people and industrial

relations■■ ensuring quality standards are

maintained to minimise dilution■■ taking an innovative approach to

modifying current technology and methods to suit narrow mining■■ good stakeholder engagement ■■ a focus on ‘keeping it simple’.The mine has also invested

substantially in executive coaching of its leadership team, which has paid dividends in the problem-solving potential of that team and ensuring that the operation delivers on its promises to all stakeholders. The operation has become safer, and employees are more aware of their individual contribution to safely and efficiently produce gold and antimony. This, in turn, benefits the whole operation, community and region.

The Costerfield mine is an underground operation utilising narrow mining techniques to extract vertical

veins. It produces up to 80 000 equivalent ounces of gold per annum in both gold and antimony value. Costerfield sells a gold-antimony concentrate comprising 54 per cent antimony (Sb) and approximately 60 g/t gold. A gravity gold concentrate is also produced.

Costerfield has been operating for ten years, and has been owned by Mandalay Resources Corporation for the last six years. The asset is managed by a small team using narrow-vein underground mining methods, which has enabled it to maintain sufficient cash flow to be self-funding during the current commodities downturn.

Under the ownership of Mandalay, Costerfield has increased production rates to a record 42 000 oz of saleable gold and 3700 t of the specialty metal

antimony, or approximately 65 000 saleable ounces gold equivalent (Au eq oz) in 2015. Operational improvement highlights from 2009 to 2015 include: ■■ improved mill throughput from

approximately 170 t/d to approximately 420 t/d■■ reduced mining cost per tonne from

$260/t to $156/t ■■ changed mining method from cut-and-

fill to blasthole stoping with cemented rock fill ■■ contracted-out capital development ■■ increased sublevel spacing from five to

ten metres ■■ growing mine life from zero reserves to

roughly four years (SRK Consulting, 2016) while mining continuously for six years.

Even with a decreasing antimony price since the boom (as shown in Figure 1), Costerfield has remained profitable, with all-in costs averaging US$760 ounces gold equivalent in the fourth quarter of 2015 (based on metal prices of Au US$1202/oz

Costerfield – a narrow-vein case studyOver the last six years, Mandalay Resources has increased production rates and improved safety outcomes at its Costerfield mine in Victoria, Australia

M McCarthy MAusIMM, Mine Manager, Mandalay Costerfield Operations Pty Ltd

Figure 1. Antimony price 2007-15. Source: USAC (2015).

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Feature - Gold

Geology and mining methodThe antimony-gold deposit at Costerfield is part of a geological province confined within the Siluro-Devonian Melbourne Zone. The mineralisation consists of faulted-hosted veins that are mostly less than 1.5 m in width and have been formed in multiple phases, including a bedding-parallel laminated barren quartz phase, followed by a quartz-pyrite-arsenopyrite phase with coarse gold, then a massive stibnite with distributed fine-grained gold phase. Reefs are ‘en echelon’-style narrow-vein systems dipping from 25° to 70° west or 70° to 90° east. In-vein grades are generally around 30 per cent antimony and 50 g/t gold and, with planned dilution, average 3-5 per cent antimony and 8-12 g/t gold. Typical vein orientation is shown in Figure 2 (SRK Consulting, 2015).

The underground production areas are accessed by a decline to approximately 350 m below surface. The decline is constructed 4.5 m wide and 4.8 m high and is used for access and haulage. It has been developed using a twin boom jumbo. Waste access levels in the Cuffley deposit are 2.8 m high and 2 m wide, and are mined using handheld and single boom jumbo methods. Multiple veins are accessed from each decline cross cut.

The ore development mining method is based around a development width of 1.8 m, which is 0.3 m wider than a Sandvik LH203 bucket. As there are no personnel carriers used in this size drive, people walk to the working face, and the development drifts are up to 200 m long. The Sandvik fleet is used in development bogging, stope bogging and filling duties and for carrying baskets that hold pneumatic rock drills and legs, tools, explosives and charging equipment.

Once ore development is completed,

longitudinal uphole stoping is used to extract towards the central access pillar. Access pillars in ore are staggered for stability, and crown pillars are left every 30 to 40 m vertically. These are eventually extracted using uphole retreat methods with teleremote loaders when the panel is completed. Typical stoping plans are shown in Figures 3 and 4.

Drill and blast operations use 51 mm diameter holes with two holes per ring, 650 mm hole spacing and 700 mm burden. Stable strike lengths are approximately 8 m. The aim is for a 1.2 m wide stope, but

they generally average 1.5 m, depending on ground conditions. Level spacing is approximately 8 m, and after the initial 1.4 × 1.4 m slot is fired, the stope is bogged and filled with cemented rock fill. Rather than drilling and firing a new slot, the operations have developed mesh tube rollers that take standard weld mesh sheets and roll them into tubes. These tubes are then lowered over the stope edge to form the void for the next firing.

The number of activities scheduled weekly is significant for Costerfield’s small size. There are generally 65 development

The operational challenges of narrow-vein mining include controlling overbreak as the veins being mined are only 300 mm wide.

Figure 4. View of Cuffley inclined stopes.

Figure 2. Typical vein widths in 1.8 m wide development.

Figure 3. Typical longitudinal section of a stope.

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rounds at 1.8 m length and 25 stope firings each week. Each crew is multiskilled so that any leave is covered, and there is sufficient redundancy in both operations and service sections to cover roles. Developing employees to be proficient in other areas has also helped to maintain a workforce with low turnover.

Culture, values and developing peopleMandalay is a values-based organisation. These values are kept alive in conversations in quarterly business update meetings and in recognising actions that display the values of safety, responsibility, agility, performance, innovation and value creation. There have been numerous initiatives over the last five years, commencing with a 12-month executive leadership training program.

This program allowed the leadership team to understand themselves first, enhance their relationships and break down any views of the past that resulted in any ‘silo’ mentality. After completing the program, the leadership team has functioned cohesively, seeking out strategic opportunities to solve problems and create value. Trust between members of the leadership team and in other areas of the organisation was also elevated. The program was then rolled out to the next management level down, resulting in the entire workforce having an aligned vision and focused execution.

Department leaders within the mine are given the freedom to act as owners and are empowered to make resource and purchasing decisions in a way that adds value to the elements of the mine they provide services to. The operation has also recruited leaders with experience in

running their own successful businesses, in some cases outside of the mining industry. Because these people have local relationships, they are able to deliver quicker, more cost-effective works to the operation.

The operation has also improved its safety performance, with lost time injuries/medical treatment injuries reduced by 80 per cent. Safety processes are not overly prescriptive and are risk assessment-based. A site nurse oversees employee health and wellness programs and return-to-work processes, enhancing the preventative side of injury management. Minor aches and pains are directed to physiotherapists for assessment before any work time is lost, and fitness programs using exercise physiologists and personal trainers have been implemented, especially for sedentary staff such as truck and loader operators.

In 2016, the operation embarked on the ‘Because we care’ program, in partnership with the JMJ Group, to explore a number of adaptive challenges at Costerfield and mining in general. One of the visions for this program was assisting the workforce to be happy at and outside of work. This element of the culture at Costerfield – caring about the whole person and what is important to them – is one factor that attracts employees. The operation also partners with Risk Response and Rescue for incident response and emergency management training.

Quality standards to minimise dilutionThe operation is currently plant-limited, and every additional waste tonne will displace metal and ounces through the plant. Quality standards are maintained in the development cycle by supervisor and foreman checks, survey calculations of monthly overbreak and giving the individual miner licence to alter drill and blast practices in poorer ground areas. Turn outs are often mined to design and then carefully stripped, depending on lode strike, to allow loaders to turn tightly to minimise intersection spans and dilution.

During the stoping cycle, a production drill leader oversees drill accuracy and training of staff, the majority of whom are internally trained to operate the production drills. A void laser scanner monitors performance and solves issues in narrow stopes (refer to Figures 5 and 6), and backup air-leg miners are trained to operate the production drills. Cemented rock fill quality has been improved by

ensuring that only dedicated areas are used for mixing and that correct water and cement ratios are used, with mix data recorded and checked. This is critical to reducing overbreak as the 24-hour curing time allows for consolidation of the previous void and provides confinement for the adjacent stope to be fired.

Any stope bridge has a production loss report created, with an incident investigation performed to determine the cause. Initial slots for stoping panels are fired and then wire mesh tubes are used to create a stope void so that 100 per cent extraction can occur along strike. Loader operators are given licence to correctly install enough tubes to cover the length and width of the stope. Any deviation from the standard that results in a stope bridge is communicated back to the operator.

For mine planning, a pneumatic Kempe drill delineates ore structures and splays, ensuring a robust mine plan. The main orebody is drilled to indicated status on 40 m centres. Faces are sampled at least every 10 m along strike and fed into a block model that is updated at least quarterly. The Kempe drill regularly identifies additional ore outside of the mine plan, which is adjusted accordingly, and a quarterly mine forecast is presented monthly and adjusted to budget. A plan analysis is undertaken in the monthly reconciliation and communicated at meetings. Figure 7 shows a typical reconciliation waterfall chart, displaying the mine plan deviation and block model deviation. Annual budgets are completed to life-of-mine with exploration upside, and the annual plan is then used to produce quarterly, monthly and weekly forecasts.

Modifying equipment for narrow widthsThe narrow mining widths at Costerfield present equipment selection challenges. As mentioned, the Sandvik LH203 loader, at 1.5 m wide, determined the initial drive width. Hand-held methods utilising pneumatic rockdrills for boring with 32-35 mm diameter face holes were initially used, and two trials were undertaken of boring with a H104 single boom jumbo. Both trials showed that overbreak was unacceptable, and the mine returned to hand-held boring on ore, using H104 in the waste access drives only. The H104 carrier was subsequently modified to drill 51 mm diameter upholes.

The equipment manufacturer Atlas Copco helped develop and refurbish the H104 single boom jumbo with a Cop1435

Figure 5. Void scanner image from 1.5 m wide stopes.


Feature - Gold

high-frequency rock drill suitable for drilling 10 m length production holes using 900 mm speed rods. No carousel can be fitted within the 1.8 m wide development drive, so rods must be added and removed manually, making it a two-person operation. The rigs often move during the shift for panel drilling, so the additional offsider can assist the driller with site checks and checking hole accuracy by drilling holes to breakthrough. The cost of developing a production drill internally was approximately half that of purchasing a new machine and had a much shorter lead time. It also matched with the philosophy of keeping it simple and using what worked in the past.

Additionally, despite some suppliers initially indicating that it could not be done, teleremote guidance was successfully fitted to units in the existing LH203 loader fleet. Teleremote operations are now used every shift to extract ore from longer stopes and dangerous close-out areas, and the operation is moving to more teleremote loaders due to the reduced exposure to operators (the LH203 is an open-cabin loader).

Other equipment used for narrow dimensions includes agricultural tractors modified to transport explosives to development faces. Light vehicles are sourced locally from second-hand 79 series Land Cruisers to minimise costs.

Maintenance is generally successful because of skilled personnel on site, including a boilermaker that is able to design and modify equipment.

Good stakeholder engagementThe Costerfield operations inject approximately A$50 million annually into the local economy. Heathcote, the nearest town, is 10 km south of the mine. Mandalay sponsors many local events, including food and wine shows and the Heathcote community games. The company also organises the annual Victorian Rock Drill Competition, showcasing the unique skills that make narrow-vein mining successful at Costerfield, and has commissioned a feasibility study for a childcare centre in Heathcote.

Understanding and listening to local stakeholders and the community has been critical to improving relationships over the time of Mandalay ownership. Even with a small team of four people in the sustainability department, the operation is able to liaise appropriately with the government and community, keeping it simple and making investments or other decisions that are reasonable and benefit local communities.

ConclusionManagement and staff of the Costerfield mine have developed a system and culture for profitably working a small, 420 t/d, narrow-vein mining and processing operation. The workplace culture and company values have resulted in effective industrial relations and high-quality standards to minimise mining dilution. An innovative approach is taken to modifying current technology and methods to suit the narrow mining conditions, and good stakeholder engagement is emphasised. Finally, an emphasis is placed on keeping things simple.

Figure 6. Photograph of void scanner equipment for 1.5 m wide stopes.

Figure 7. Reconciliation chart for October 2015.

6000

5000

4000

2000

3000

1000

0Budget Forecast Planned

not minedMined not planned

Mod over-estimate

Mod under-estimate

Mined (recon corrected)

Stockpile variance

Plant feed

Au (o

z)

4079 4124

1391

584995

285

49954710

1850

The workplace culture and company values have resulted in effective industrial relations and high-quality standards.

ReferencesSRK Consulting, 2015. Costerfield Operation, Victoria, Australia, NI-43-101 report [online], prepared for Mandalay Resources Corporation. Available from: www.mandalayresources.com/wp-content/uploads/2015/03/Costerfield_NI_43-101_Final_Mar_2015.pdf

SRK Consulting, 2016. Costerfield Operation, Victoria, Australia, NI-43-101 report [online], prepared for Mandalay Resources Corporation. Available from: http://www.mandalayresources.com/wp-content/uploads/2016/03/Mandalay-Costerfield-Technical-Report-2016.pdf

United States Antimony Corporation (USAC), 2015. Newsroom 2015 [online]. Available from: http://www.usantimony.com/2015_newsroom.htm

Gold


the diversity in the local community. An expanding community can also result in thriving businesses and better healthcare services. However, rapid changes in demographics can also put pressures on the local community. Lapalme (2003) notes that if newcomers become isolated, it may lead to an increased risk of prostitution, sexually transmitted diseases, alcoholism and violence. The literature on the matter has two apparent orientations. On the one hand, FIFO may smooth the change process for the community in the beginning and hopefully result in immigration. On the other hand, FIFO workers do not pay taxes in the local community but still use the community’s services and infrastructure. A common attitude among FIFO workers is to not see the local community as their own but rather as a place to work, sleep and then leave, which might be problematic in the long run. The main reason why this type of work is implemented is the lack of necessary skills and knowledge in the local community (Azapagic, 2004). Risks associated with FIFO, as well as satisfaction with life in a local community among FIFO workers and locals, thus seems to be an issue for the community and the mining company (Abrahamsson et al, 2014).

An emerging issue relates to the treatment of indigenous people when a mine site is developed. According to Lapalme (2003), the issue requires sensitivity to preserving indigenous people’s traditions, spirituality, hunting ground, etc to achieve sustainable development. Furthermore, the involvement of indigenous communities should be encouraged, and an adequate proportion of the workforce should come from the indigenous population.

Traditionally in mining, the social licence to mine, and indeed social sustainable development in general, has

been concerned with the mining company proving their potential to bring positive effects to the local community. It has been a process of building trust with the community through dialogue and outreach activities. However, this does not necessarily reflect the actual situation when it comes to sustainable development in these particular contexts. In this article, we highlight the social aspects of sustainable development in both the mining industry and the surrounding communities, including the new challenges that have emerged and the need for a mutual process in the common ambition of creating social sustainability. Consequently, we focus on a broader range of aspects of socially sustainable development – diversity, work conditions and gender – which are all important parts of the challenges that mining activities meet.

DiversityDiversity is a key word for social sustainability. To improve life conditions in a community, the community must make sure that its citizens can live their lives in a variety of ways (ie that there is diversity). In this article, we interpret diversity as a variety of lifestyles that a person can lead in a community influenced by the mining industry. Two positive signs of enabled diversity is thus ethnic and social diversity.

However, sometimes there are contradictory aspects. For example, social trends such as strong community identity can be seen as a good ground for cohesion that contributes to higher satisfaction

within the community, but may also be associated with a lifestyle that is not inclusive. Scott, Carrington and McIntosh (2012) argue that strong community cohesion might lead to the perception of indigenous people and ‘fly-in, fly-out’ (FIFO) workers as ‘the other’.

Concerning demographics, Petkova-Timmer et al (2009) have found that more men than women live in Australian mining communities and that it is common for young women to leave such communities. In Sweden, similar tendencies have been found (Rauhut and Littke, 2016). While it is hard to distinguish between effects related to the mining industry and general demographic effects, it remains a relevant issue for mining companies.

Attractive housing opportunities and the built environment are important material factors for social sustainability. During an active period, the mining industry will need new workers, resulting in a need for new permanent or temporary housing solutions. A thoughtful strategy for new housing and the built environment can be a key aspect of sustainable development for immigration built on diversity (Johansson et al, 2016). Still, it is unclear what responsibilities mining companies might share with the community and government, though some mining companies are trying to fill the gaps in regional planning and service delivery where government activity is weak and community capacity is low (Morrison, Wilson and Bell, 2012).

When a new mine is established, the migration and influx of outsiders both come with different types of consequences. If handled in a cautious way that recognises potential social issues, this influx can certainly increase

Challenges in obtaining a social licence to mineSocial aspects related to mining such as inclusive recruitment, participation in community planning and creating safe workplaces can affect a company’s social licence to mine

L Abrahamsson, Professor; J Lööw, Doctoral student; M Nygren, Doctoral student; and E Segerstedt, Doctoral student; Division of Human Work Science, Luleå University of Technology


Feature - Working with Communities

Work conditionsHistorically, the focus regarding work conditions in mining has mainly been on factors to ensure that mine workers are not injured on the job, such as individuals’ health, occupational medicine, basic and practical workplace safety and the physical work environment. However, the interest in organisational and sociotechnical perspectives is growing. Issues associated with how to create good physical and psychosocial environments that positively influence productivity, innovation and employee well-being and learning are central.

In research, the importance of taking a broad perspective on occupational health and safety (OHS) to create sustainable work environments is clear. Indeed, it seems obvious that not only human error, but the interaction between technical, organisational, psychological, environmental and physical factors cause work-related illness (Cliff, 2012). There is also a general agreement that human factors and ergonomics need to be included in the technological

development aspects of sustainable development.

As a result, work conditions, in conjunction with automation development and remote operation centres, need special attention. Such new work conditions include cleaner underground production as well as better personal protection and technical safeguards, but this new work environment has also led to new problems, such as computerised work tasks that run the risk of creating repetitive, monotonous work for miners (Li et al, 2011). It must be ensured that the positive aspects of these developments are utilised.

The aforementioned issues of FIFO workers are also present in the discussion on work conditions. While this type of outsourcing and contracting offers volume flexibility and expertise, it makes recruitment and development of the whole of the mining workforce complex, not least in regards to safety training and organisational changes (eg the implementation of lean production/mining and the development of a learning organisation). Over the last decades, the use of extended work days (regular shift lengths of ten or 12 hours per day while still maintaining a 40-hour work week) has also become more common and is a popular solution among FIFO and

The importance of taking a broad perspective on occupational health and safety to create sustainable work environments is clear.



young people. A related problem is the tendency for women and youth to move away from mining communities. Thus, a precondition for being able to recruit the right workforce is that the mining industry can offer interesting and safe work that attracts people of all ages – both women and men. An organisation that supports teamwork, communication and learning at work makes the jobs more interesting and stimulating for the mining workers and can contribute to enhanced innovation and competitiveness in the mining industry. This notion of creating an attractive mine (Lööw, Johansson and

Andersson, 2016) is an important part of socially sustainable development and will likely make it easier to get a social licence to mine.

GenderAs mines become increasingly characterised by complex technology, a challenge will be to recruit skilled labour and expertise to mines that are often located far away from larger cities. Often, it is difficult to attract young people and women to jobs in the male-dominated mining sector.

The Swedish strategic research and innovation agenda for the mining industry (Andersson et al, 2013) identifies important links between gender equality, efficient use of resources, attractiveness of the workplace, innovation and sustainable growth. For several years, however, the most obvious gender issue in the Swedish mining industry has been to attract women to and retain them in its

contractor workers. Such shifts can increase the number of accidents and lead to other OHS problems, including psychosocial issues (Dembe et al, 2005). Extensive use of night shifts can even potentially create seclusion from the local community.

Matters of education, on-the-job training and learning organisations have become more common as well. One particular focus is the future labour and skill supply. Modern mines are so technically advanced that the proportion of unskilled labour will decrease significantly or disappear. Some mining companies fear difficulties recruiting

Companies and local mining communities should raise awareness of the social aspects related to mining.



traditionally male-dominated workplaces. In the major mining companies, 85-95 per cent of the miners are still men, and widening the perspective to include innovation, research and development does not significantly change this picture. In response, research on women in mining has grown, focusing on why and how women are excluded from the mining industry. This includes research on the problems of active exclusion, ideological opposition and sex discrimination and harassment against women miners.

A related issue is men and masculinity in mining. Today, there is still not only an overt visibility of men in the mining sector, but also a conflation of men with competence and expertise that is taken for granted. Structures and technologies are supposed to be gender-neutral, but many actually favour men (Lahiri-Dutt, 2011; Knobblock, 2013). Abrahamsson and Johansson (2006) found that the identity and symbolic aspects of work lag behind the structural changes at the workplace, such as new technology and new qualification demands. This miner masculinity/identity functions not only as a gatekeeper towards women and hinders gender equality interventions, but it can also create problems for the implementation of safety procedures, new technologies, new organisational forms and environmental awareness as well as barriers for a diversity of lifestyles for men (Eveline and Booth, 2002; Abrahamsson and Somerville, 2007).

Swedish mining companies LKAB and Boliden can both be used as examples of companies that are attempting to rectify this situation. During the last few years, they have implemented several ambitious gender initiatives, both within the companies and in collaboration with local communities (eg wage-mapping systems, women’s networks and gender-aware trainee and recruitment efforts for executives and technology experts). However, despite a consensus on the value of gender equality and in spite of the ambitious initiatives and some progress in recent years, it has been hard for mining companies to break the industry’s male-oriented gender patterns (Andersson et al, 2013). Moreover, the number of women has always risen during good times and fallen during recessions. Today, the mining industry faces severe challenges due to falling prices, leading to

difficulties in achieving profitability. It is yet to be seen what this will entail when it comes to the number of women in the aforementioned companies.

ConclusionsDiversity of lifestyles, work conditions and gender issues are aspects of socially sustainable development in mining communities where norms on a local community and company level interact. To obtain a social license to mine, companies and local mining communities should raise awareness of the social aspects related to mining, such as inclusive recruitment, participation in community planning, addressing FIFO policy, preventing work-related illness, organising on-the-job training and promoting inclusive gender norms. Viewing social license as a process on both community and company levels, as well as the interaction between those levels, should contribute to socially sustainable development.

Challenges for diversity in mining communities include solving housing issues and balancing recruitment of FIFO workers, enabling indigenous people to have access to both traditions and mining work, and addressing demographical issues in remote communities where mines are often situated. When it comes to work conditions, one of the main challenges is considering the combination of the organisational, technical and psychological factors and planning schedule to avoid the risks that come with working long shifts. As for gender issues in mining communities and companies, there is a challenge in combining structural changes that enable equal participation in mining work with symbolic actions addressing mining identity. With all of these challenges come possibilities to reach higher community satisfaction in mining communities and more socially sustainable development in the mining sector.

Abrahamsson L and Somerville M, 2007. Changing storylines and masculine bodies in Australian coal mining organisations, Norma, 2(1):52-69.

Andersson E, Abrahamsson L, Fältholm Y and Lindberg M, 2013. Breaking Ore and Gender Patterns: A Gender-aware and Sustainable R&I-agenda for the Swedish Mining Sector, 39 p (Luleå University of Technology: Luleå).

Azapagic A, 2004. Developing a framework for sustainable development indicators for the mining and minerals industry, Journal of Cleaner Production, 12(6):639-662.

Cliff D, 2012. The management of occupational health and safety in the Australian mining industry, International Mining for Development Centre.

Dembe A E, Erickson J B, Delbos R G and Banks S M, 2005. The impact of over-time and long work hours on occupational injuries and illnesses: new evidence from the United States, Occupational and Environmental Medicine, 62:588-597.

Eveline J and Booth M, 2002. Gender and sexuality in discourses of managerial control: the case of women miners, Gender, Work and Organization, 9(5): 556-578.

Johansson T, Segerstedt E, Olofsson T and Jakobsson M, 2016. Revealing social values by 3D city visualization in city transformations, Sustainability, 8(2):1-17.

Knobblock E, 2013. Organizational changes and employment shifts in the mining industry: toward a new understanding of resource-based economies in peripheral areas, Journal of Rural and Community Development, 8(1):125-144

Lahiri-Dutt K, 2011. The megaproject of mining: a feminist critique, in Engineering Earth (ed: S D Brunn) (Springer: Rotterdam).

Lapalme L-A, 2003. The social dimension of sustainable development and the mining industry – a background paper, Minerals and Metals Sector, Natural Resources Canada, Minister of Public Works and Government Services Canada.

Li X, McKee D J, Horberry T and Powell M S, 2011. The control room operator: the forgotten element in mineral process control, Minerals Engineering, 24:894-902.

Lööw J, Johansson B and Andersson E, 2016. Designing the Safe and Attractive Mine (Luleå University of Technology: Luleå).

Morrison T H, Wilson C and Bell M, 2012. The role of private corporations in regional planning and development: opportunities and challenges for the governance of housing and land use, Journal of Rural Studies, 28(4):478-489.

Petkova-Timmer V, Lockie S, Rolfe J and Ivanova G, 2009. Mining developments and social impacts on communities: Bowen Basin case studies. Rural Society, 19(3):211-228.

Rauhut D and Littke H, 2016. ‘A one way ticket to the city, please!’ On young women leaving the Swedish peripheral region Västernorrland, Journal of Rural Studies, 43:301-310.

Scott J, Carrington K and McIntosh A, 2012. Established-outsider relations and fear of crime in mining towns, Sociologia ruralis, 52(2):147-169.

ReferencesAbrahamsson L and Johansson J, 2006. From grounded skills to sky qualifications: a study of workers creating and recreating qualifications, identity and gender at an underground iron ore mine in Sweden, Journal of Industrial Relations, 48(5): 657-676.

Abrahamsson L, Segerstedt E, Nygren M, Johansson J, Johansson B, Edman I and Åkerlund A, 2014. Mining and Sustainable Development: Gender, Diversity and Work Conditions (Luleå University of Technology: Luleå).



operate. It is our desire to create transparent and open communication where all parties find mutual benefit and support. We believe that these relationships are the foundation for successful resource development as we invest in and acknowledge the history that people have with the land and communities in which we operate.

Context and process The Carrapateena copper-gold deposit acquired by OZ Minerals in 2011 is currently in feasibility stage and is located on land for which the KAC hold Native Title. The project is also in South Australia’s Gawler Craton, a highly prospective copper province. The KAC and the Kokatha people have a long history of interacting with resource proponents – some positive and some not so.

While local level agreements with key stakeholders are a legislative requirement for resource projects, the process by which these agreements are developed is important.

It was recognised from the outset that the relationship between OZ Minerals and the KAC would be critical to the long-term success of the Carrapateena project and any future activity throughout South Australia’s Gawler Craton. Respecting and protecting the rights of the Kokatha people and aligning with the

Stable local level agreements with land-connected people throughout the life-of-mine are fundamental to successful

resource development. How this process is facilitated and executed sets the tone of the relationship with stakeholders, host communities and regulators throughout the life of the project and beyond. In developing a Native Title Mining Agreement for the Carrapateena project, OZ Minerals and the Kokatha Aboriginal Corporation (KAC) sought to develop a mutual and participatory approach of working together to inform the agreement-making process. Both organisations voluntarily agreed that a partnering agreement would be developed to inform and underpin the relationship between KAC and OZ Minerals. The agreement determines the nature, parameters and values of the partnership over the life-of-mine and beyond.

This article discusses the rationale, process and objectives associated with creating and implementing a partnering agreement between the KAC and OZ Minerals for the Carrapateena project.

Stakeholders

Kokatha Aboriginal CorporationThe Kokatha people have a long, unbroken connection with the land on which the Carrapateena project is located. Our

Native Title was determined in September 2014. The Kokatha people are the Traditional Owners of a large section of the land in the north of South Australia. We have a long history of interactions with mining, exploration, pastoral and defence proponents. While many of our people live in the far north of South Australia, there are many Kokatha widely dispersed throughout Australia. Kokatha aims to protect its heritage and culture and develop processes to ensure places of social, cultural, historical and spiritual significance are preserved and protected.

OZ MineralsOZ Minerals owns and operates the copper-gold-silver mine at Prominent Hill and is developing one of Australia’s largest copper-gold resources at Carrapateena. We are focused on creating a pipeline of opportunities with a commitment to safety and capital discipline, which are underpinned by our strong values. We are a modern mining company that adapts to our ever-changing environment, harnessing the innovative ideas of our people and collaborating to leverage the experience of those around us.

Our commitment to creating and maintaining effective partnerships with all of our stakeholders is fundamental to OZ Minerals and the lands in which we

Local level agreement makingPartnering beyond stakeholders, from across the table to around the table

Geoff Deans, Principal Advisor Land Access, OZ Minerals; Khatija Thomas, Executive Member, Director and Treasurer of the Kokatha Aboriginal Corporation; and Ian Dixon, Dixon Partnering Solutions

Figure 1. The IAP2 Public Participation Spectrum. see www.iap2.org.au/

INFORM CONSULT INVOLVE COLLABORATE EMPOWER



values of ‘free prior and informed consent’ (United Nations, 2008) meant that a traditional western or commercial approach to agreement making would not provide the structure to explore all opportunities, but a partnering approach would.

While stakeholders are generally informed and consulted about decisions that are being made, it is rare that they are empowered to inform the design or decision-making process, where they can truly influence the outcome.

Exploring the partnering approach is innovative in the resources sector, and provides an opportunity for both companies to think and act differently. The term ‘partnering’ is based on an emergent model in which companies work with government and communities on initiatives that help strengthen the social, human, economic and cultural capital of the area (Department of Industry, Tourism and Resources, 2006).

The partnering approach and process was new to both organisations, and early discussions centred on developing trust, building common understanding and language, identifying issues, learning from each other, developing transparent and honest relationships and overcoming legacy issues. A key part of this discussion

was the acknowledgment from the outset that the power relationship between parties is not always in balance. As such, it was important to create a space where both parties felt respected and were sitting at the same table as equals. This enabled both organisations to identify opportunities for maximising shared value, which was based on the respective organisations’ strengths, needs and interests.

The discussion process was overseen by an independent and skilled facilitator, who led the two organisations through a process of reciprocal educational awareness, participatory knowledge and impact management processes. This delivered tangible outcomes for OZ Minerals and the KAC in the design and approvals process as it reinforced that land-connected people, along with other local stakeholders, have context-specific knowledge, experience and insight that are material to informing resource project

development. By adopting the mantra ‘no surprises and no assumptions’, risks and impacts were identified early. This transparency provided confidence and efficiency for both organisations.

What do we mean by partnering?The partnering approach adopted by OZ Minerals and the KAC is an integrated cross-sectoral approach based on principles of equity, transparency and mutual benefit (The Partnering Initiative, 2016). It is more than the traditional transactional arrangements underpinned by a contract that are often seen between mining companies and Indigenous communities.

This approach enables partners to work together to co-design solutions. While the process is more challenging to undertake than transactional types of partnering, this offers far greater strategic value to all partners.

The movement towards an integrated,

It was important to create a space where both parties felt respected and were sitting at the same table as equals.

Andrew Cole and Chris Larkin after signing the partnering agreement

on 3 November at Carrapateena.



the Carrapateena site and was attended by the full Kokatha Board and the OZ Minerals executive ■■ creating a safe space where both parties

felt that they could share information openly and come to the table as equals■■ engagement of an independent

partnering specialist (and internationally accredited partnership broker) to design and manage the process and help both parties navigate their way through the critical early stages■■ high-level commitment from each

organisation to support the partnering process and be fully engaged ■■ early emphasis on building a foundation

of trust and respect through sharing of information and stories ■■ providing opportunities for socialising

and being ‘on country’ for key meetings and discussions■■ focus on discussing ‘how’ the partners

wanted to work together now and into the future■■ designing both large and small group

meetings that enabled sufficient time to build relationships and discuss and debate substantive issues.

The outcomesIn September 2016, four months after the commencement of the partnering process, the KAC and OZ Minerals settled on the partnering agreement. An extract of this agreement is presented in the breakout box at left.

What has this meant for us?

Kokatha Aboriginal Corporation‘The process was developed together and not imposed. This has meant Kokatha and OZ established a trust which allowed us to put together an agreement in record time. The process has ensured a strong commitment to make it work and has left my Directors feeling valued and respected.

Our partnering agreement, “Nganampa palyanku kanyintjaku”, translated means “keeping the future good for all of us” in Kokatha; this encapsulates the outcome of the process and the feelings of my community.’Chris Larkin, Chairman, Kokatha Aboriginal Corporation.

OZ Minerals‘To my mind this will be one of the most important documents I’ve signed in my time as CEO of OZ Minerals. It’s an acknowledgement that today, tomorrow and in the years ahead this project will be a partnership with the Kokatha people.

Not only symbolically in that you will see our respective logos side by side, but also in developing economic opportunities, building cultural understanding and formally recognising the Kokatha’s connection with the land which stretches back thousands of years.

A core focus of OZ Minerals is to build strong and lasting partnerships. We

transformational approach is starting to be adopted globally as companies and communities seek more sustainable and value-generating partnerships. As a result, a new profession of internationally accredited partnership brokers has emerged. These brokers act as intermediaries while building partnering capability and are a critical part of the partnering process (The Partnership Brokers Association UK, 2016).

Key elements of the partnering processThe partnering process enables space for the expression of various viewpoints and welcomes diversity into the process, which is the key when forming collective-based decisions. This approach translated to the notion that slower is faster. Common knowledge and understanding provides the foundation on which collectively endorsed commercial agreements can be developed.

Some of the key elements that were critical to the success of this process were (in no particular order):■■ strong representation at the first

meeting, which was held ‘on country’ at

Partnering Agreement extractNganampa palyanku kanyintjaku‘Keeping the future good for all of us’

This Partnering Agreement provides the foundation for the relationship between the Kokatha Aboriginal Corporation (KAC) and OZ Minerals Limited (OZ Minerals) in relation to, and throughout the life of, the Carrapateena Project and any other future OZ Minerals projects in Kokatha country, including project rehabilitation.

It seeks to outline the overarching purpose for the relationship and to set out how both partners will work together into the future.

Purpose of the Partnering AgreementKokatha Aboriginal Corporation and OZ Minerals will work together:

To create sustainable benefits by leveraging, developing and building on our shared values and aspirations, whilst protecting and respecting country and culture.

Partnering Workshop 1, June 2016. Kokatha Aboriginal Corporation Executive and OZ Minerals Executive ‘on country’ above the Carrapateena deposit.



Principal Sponsor

ausimm publication

"This is one of those books that has the potential to transform the performance of an industry. Readers who take the trouble to understand the concepts and processes and put them into practice will gain a valuable advantage over their competitors."

Geoff Sharrock FAusIMM(CP), AusIMM President 2013–14

www.ausimm.com/shop

cut-off Grades and optimisinG the strateGic mine plan

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Principal Sponsor

ausimm publication

"This is one of those books that has the potential to transform the performance of an industry. Readers who take the trouble to understand the concepts and processes and put them into practice will gain a valuable advantage over their competitors."

Geoff Sharrock FAusIMM(CP), AusIMM President 2013–14

www.ausimm.com/shop

cut-off Grades and optimisinG the strateGic mine plan

spectrum 20 | brian hall

recognise that in the modern mining environment genuine, long-lasting partnerships are a must have.’Andrew Cole, Managing Director and CEO, OZ Minerals.

The futureThe journey of partnering has assisted the Kokatha and OZ Minerals in identifying and agreeing on what success will look like for both organisations in the short and long term. The challenge moving forward is to ensure that this adapts and grows throughout the operational life cycle and future developments so that benefits are realised for both the Kokatha community and OZ Minerals.

The partnering agreement developed collectively gives structure to the long-term relationship between the Kokatha and OZ Minerals. It provides a foundation that will underpin the commercial Native Title Mining Agreement. The process has identified mutual commitments to achieving long-term and intergenerational benefits and outcomes. Both parties’ actions moving forward will now be the key to success.

There is recognition that change will be a constant to both organisations; as such, the approach to partnering and the agreement is a sustainable design. Those with leadership positions within their respective organisations have taken on

personal and corporate responsibility to ensure that values in this agreement are fostered and embedded in the way that both organisations do business.

Conclusion Beyond the journey of developing the partnering agreement, comprehensive information was shared by both organisations. The Kokatha shared their connection and knowledge of country, while OZ Minerals shared the proposed project profile, including potential opportunities and threats.

The partnering approach has been crucial to both organisations and their communities through the investment in understanding each other. Partnering allows both organisations to interact regularly and proactively, which sets the tone for the relationship. The process created space to raise issues, concerns and opportunities. This allowed problems to be prevented and opportunities to be identified early. This was pivotal to the

formal agreement-making process for the Carrapateena lease, creating mutual understanding, trust, respect and integrity. It will be on this basis that the relationship between the KAC and OZ Minerals will continue throughout the life of the project.

The partnering agreement developed collectively gives structure to the long-term relationship between the Kokatha and OZ Minerals.

ReferencesThe Partnering Initiative , 2016. The Partnering Initiative website. Available online: www.thepartneringinitiative.org

The Partnership Brokers Association, 2016. The Partnership Brokers Association website. Available online: www.partnershipbrokers.org

Department of Industry, Tourism and Resources, 2006. Community Engagement and Development: Leading Practice Sustainable Development Program for the Mining Industry, Australian Government. Available online: www.minerals.org.au/file_upload/files/resources/enduring_value/CED.pdf

United Nations, 2008. United Nations Declaration on the Rights of Indigenous Peoples and Free, Prior and Informed Consent, GA Res 61/295, UN Doc A/RES/61/295 (13 September 2007).

Partnering process. L-R, Geoff Deans (OZ Minerals), Glen Wingfield (Kokatha Aboriginal Corporation (KAC)), Michael Turner (KAC), Max Reid (KAC), Chris Larkin (KAC), Bob Fulker (OZ Minerals), Khatija Thomas (KAC), Brett Triffett (OZ Minerals), Mark Rankmore (OZ Minerals).



happen, and common themes emerge of their ability to create healthy working relationships between owner and engineer teams and a combined sense of purpose. Project success correlates well with the strength and effectiveness of the whole team, the balance and quality of people and positive relationships between the different parties.

Fifty years ago, psychologist Dr Bruce Tuckman proposed a model showing how teams went through various stages of development before they became effective and productive units, which he called Forming–Storming– Norming–Performing.

While Tuckman’s model (Figure 1) is not the only way of illustrating what happens, it can prove valuable in understanding how teams function. The ultimate aim is to use this to get better results from teams, avoid getting ‘stuck’ in the early phases and move rapidly into working together effectively.

Stage 0: Pre-formingAlthough not part of Tuckman’s original model, this initial phase takes place before the study or project formally commences (ie at ‘proposal’ stage), and can lead to the seeds of future problems being sown. Assuming that an owner wishes to select an engineer to execute and/or manage its study or project, a well-defined scope of work has to be produced. However, all too often scopes are ill defined, provide relatively little guidance and offer minimal information, with the hope that engineers will ‘work things out for themselves’. During the brief response period, bidders have to manage resources, propose a project team, evaluate the work schedule and deliverables, derive work hours, provide a commercial bid, respond to the various schedules and write an

Several factors contributed to the severe cost escalation in the first decade of the 21st century. Some relate to increased complexity

and massive infrastructure requirements due to location, challenging metallurgy and significant environmental and social requirements. However, many problems were laid at the feet of ‘people’ and the falling skills and experience available, running counter to the increase in the amount and cost of engineering work that goes into studies and projects. In short, a question of ‘whatever happened to the “A” team?’

Technical fundamentals aside, the experience and effectiveness of project teams continues to have a major impact on project cost, schedule, ramp-up to nameplate capacity and meeting operating parameters.

Arguably, far too little effort goes into people, and particularly team, development. Given its importance to project success, understanding how

project teams grow and become efficient and productive is an essential part of good project management. Reasons for suboptimal team, and hence project, performance are discussed in this article, as is how best to build and then maintain project teams. Tuckman’s (1965) model of group development – Forming–Storming–Norming–Performing – is used as a framework. Although first proposed some 50 years ago, it remains seminal in understanding how teams function and grow.

Overview: the need for good teamworkThe effort and cost required to design and build projects has increased markedly. In boom times, ‘speed to market’ was the overwhelming driver, creating huge demand for good people. Having struggled to secure people, too little attention was paid to developing them and the teams to which they belonged.

On the positive side, good projects do

Building and maintaining effective project teamsEffective project teams are essential for project success – how should owners and project managers form the right team for the job?

Richard Dewhirst FAusIMM(CP), Managing Director, Limehurst Consulting; Ken Thomas,President, Ken Thomas and Associates Inc; John Wells, Consultant, Alquimia Conceptos; and Andrew Roberts, Psychologist and Facilitator


Feature - Mine Site and Project Management

Figure 1. Tuckman’s Forming–Storming–Norming–Performing model.

TIMELINE OF THE STUDY OR PROJECT

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0: Pre-forming

1: Forming

2: Storming

3: Norming

4: Performing

5: Re-forming

attractive proposal to convince the owner to select their company.

From past experience, there may already be a lack of trust between the parties at both personal and corporate levels, such as a view that engineers always overcharge, aim for scope creep and have to be closely managed. If the work has been won with a very tight budget, the engineer will be under pressure from their own organisation right from the start to recoup costs.

Although these may be perceptions and preconceptions, if the project starts on such a footing, it is little wonder that the honeymoon period is brief. ‘Trust me, I’m an engineer’ simply isn’t enough!

Stage 1: FormingRecognising shortcomings in proposals, time is needed to refine scope, clarify understanding and set a baseline budget and schedule. It is essential to start with some form of ‘kick-off’ meeting that provides an opportunity to align overall vision, project charter, methodology, approaches and key objectives and fix schedule, milestones and budget. Owner and engineer project managers set the tone and must plan and ‘stage manage’ proceedings to stamp their authority and leadership positively on the project.

Equally important is building the appropriate culture so that people get to know each other, ask questions without fear and begin to understand their roles, responsibilities and budgets.

Although skilled at evaluating their technical skills, we seldom recognise that people in teams need other skills to get the job done, such as being used to working with others, appreciating the impact of their workflow and decision-making on others and understanding that they are part of a team rather than operating in isolation.

Productive teams don’t just happen and ‘stars’ alone don’t bring success, especially if the team as a whole is not in balance and pulling together. Belbin recognised this in the 1970s, and his seminal work using an inventory of psychometric tests found that balance rather than straight intellect enabled a team to succeed. Successful teams employ a mix of people with different, but complementary, behaviours.

Choosing the right location and layout for people to work together is important. A more integrated layout improves communication and creates the sense of a common purpose, loyalty and commitment to the project.

Teams are usually composed of core permanent members, as well as those required for specific tasks or deliverables that are only associated with the project for part of the time. The project manager has to ensure that they are available when needed and must fully integrate the team when present. The engineer’s team can typically comprise 30 to 50 people for studies and consist of several hundred for engineering, procurement and construction management projects, so people management and leadership are essential skills for any good project manager.

From the owner’s side, the owner’s team can vary from a handful of individuals to very large teams. In some

Productive teams don’t just happen and ‘stars’ alone don’t bring success, especially if the team as a whole is not in balance.

Photo by Juan Felipe Rubio. Used under CC BY 2.0.



representatives from the engineer, owner and others is valuable here. This is similar in intent to the kick-off session, but now people know each other and the project better. This session is held one or two months into the project, and a trained facilitator often aids the process. At least a full day in a location out of the regular office seems to work best.

By now, the need to address social/community and environmental issues should also be impacting strongly on the project. Potential community resistance to projects cannot be ignored, and the term ‘social licence to operate’ well describes how the owner is expected to assist the community to elicit their support. Many project teams include personnel engaged specifically to work on such issues and provide guidance to their technical counterparts. Relevant social issues impact and constrain technical decision-making, particularly in contentious matters such as tailings dam location, overland pipelines, roads, powerlines, vehicle routes and the use and distribution of scarce water resources. Purely technical or low-cost solutions on

their own are no longer acceptable. In addition, to ensure that practical

solutions are derived, it has become the norm for study phases to bring specialists with execution and operations experience into the study team early on.

This phase can be difficult and sometimes confronting, and knowing how we are doing is important. Why not ask the team? Various forms of survey options can be used. Surprisingly candid comments can give the project manager a good idea of where problems may lie and allow timely and appropriate actions to be taken to address them.

To help the transition from this phase, symbolism can be important. Whether it is in having jackets, mugs or t-shirts specially made, or simply having a unique style of literature, stationery and noticeboards, it is about creating a sense of belonging and identification with the project as a whole. This can also be extended to the style of meetings and to functions that celebrate meeting milestones or achievements.

Stage 3: NormingThe clarification of key project parameters and early ‘freezing’ of design criteria, standards, flowsheets, specifications and other key documents

countries, ‘man marking’ is common, with large teams overseeing the engineer. Smaller teams arguably achieve better results, but this depends upon the quality of the engineer’s team and the complexity of the project itself. The owner’s team directs and controls the engineer but should avoid becoming engineers themselves and unnecessarily duplicating efforts.

Stage 2: StormingFinding a ‘common language’ in projects is often contentious. This is about both the language of engineering (design criteria, standards, terminology and acronyms) and the mother tongue (and culture) of different parties. In this increasingly global world, teams can be very diverse.

In health and safety, shared values have to be front of mind for team members. This is the time to establish non-negotiable protocols such as safety systems, agreeing definitions and metrics, setting personal protective equipment standards, communicating progress and sharing areas of risk and concern.

An alignment meeting involving senior

In health and safety, shared values have to be front of mind for team members.

Photo by BAKOKO. Used under CC BY 2.0.



and drawings is crucial. This ensures that clear directives are given to the various disciplines, and establishes budgets and deliverables used to control schedule and expenditure.

Constant changes to philosophy, equipment choice, flow sheets or specifications beyond the first few months are extremely disruptive. This is a critical issue for the project manager as it will cause budget and schedule over-runs. What-ifs and trade-offs should be sensibly managed, particularly after prefeasibility, which by definition should carry forward a single project configuration.

Much has been written about the importance of ‘front-end loading’, and comprehensive research demonstrates the value of doing sufficient work up front before jumping into execution. The authors go further in advocating that those who will build and operate the facilities must be involved as early as possible in studies.

A contentious issue is the euphemistically termed ‘value engineering’ meeting that often occurs during this stage. After months of careful engineering, the capital cost may be unpalatable and a meeting is called with the objective of a cost reduction of 10 per cent or more. Value engineering does have a role to play, but trying to do it late in the project does not generate the ‘value’ expected, and hypothetical savings often come back to haunt in the form of a failure to meet performance standards or higher operating and capital costs creeping back in.

Stage 4: Performing This is the upward sloping part of the curve in Figure 1, showing the team and the project being effective and efficient. Previous stages should have been progressively leading up to this, but it can still be a troublesome phase.

The frequency, content, style and culture of a myriad of meetings are particularly important. Meetings are essential in communicating, reporting progress and agreeing actions. Good meetings allow for honest and open communication, and participants leave with a sense of commitment and enthusiasm. Bad ones engender a sense of futility and depression. Project managers should thus pay particular attention to the quality and frequency of their meetings.

Risks still abound and need to be clearly defined, along with appropriate mitigating

measures. Macro risks often involve social and environmental issues. Technical risks are usually easier to define, but discipline engineers need the necessary experience to manage the risks and accept ownership for mitigating appropriately.

Given that people are the key ingredient to project success, risk is best reduced by getting excellent owner and engineer teams in place, ensuring that they remain on the project for the duration and having them work cooperatively and always doing what is right for the project.

A significant cause of conflict arises when there is a lack of transparency about real progress. Project managers are prone to over-optimism, even in the face of evidence to the contrary. Transparency is about open sharing of information. Project bulletin boards, particularly highly visual ones, are valuable in keeping people informed, highlighting progress, celebrating success and stimulating debate.

None of this underestimates the challenges in building new projects. The world has become a more complex place, and there is a tendency to try and deal with it contractually or to micro-manage it with additional structures and procedures. However, there is evidence that suggests that allowing people to act independently and cooperatively to eliminate silos is a better approach.

Despite best efforts, it is a fortunate project that does not encounter setbacks. When things go wrong, teams have to be strong enough to deal with the challenges and work together to develop a recovery plan to get the project back on track. Vigilance is needed to stay on the performing part of the curve.

Stage 5: Re-formingSome large companies have adopted a program approach of moving key staff from one study or project to another, thereby corporately and individually maintaining skills, learning, project knowledge, familiarity with procedures and relationships. This worked well when there was a project pipeline, but now that the flow has dried up, it is even more essential to spend time developing effective teams from groups of people who have not previously worked together.

One large company applies an independent project completion review process. Formally structured, this process specifically compares outcomes with the original project objectives and

justification and uses an analytical framework, including extensive interviews with team members from both sides, to elicit lessons learned and opportunities for improvement. These are then formally fed back into the project management system for future teams to learn from.

ConclusionsProjects have become more complex in the sheer number of interfaces and size of teams involved, and are complicated by the need to integrate technical with social and environmental issues. Greater complexity has added to cost and timescale.

Productive and aligned teams have proved their worth, yet companies devote insufficient attention to their development. Good teams are created – they don’t just happen. Recognising that a team is essentially a group of strangers that have to be shaped into a united group sharing common goals and purpose must be acknowledged and addressed.

Project personnel should be both well qualified technically and emotionally suited to working in the hothouse of project environments. The ability to work cooperatively, share ideas, communicate widely and do what is best for the project are equally as important as their technical proficiencies.

Tuckman’s model of how a team develops over time and must work through distinct stages before becoming productive is worth considering and can assist in understanding where a team is at a given point in time to guide the necessary interventions to keep it on track.

As the industry bumps through this painful downturn, much experience residing in the hands and heads of the older cadre can easily get lost. While nothing presented in this paper is earth shattering, it remains remarkable to the authors that the same basic mistakes keep being repeated. By articulating some of these points, they hope to help the next generation of project people avoid their own painful experiences.

ReferencesTuckman B, 1965. Developmental sequence in small groups, Psychological Bulletin, 63(6): 384-399.



much of the corporate memory at each operation. What work has been done on this subject before? Why did that stope fail? How did we manage the inundation in 1995? In the past, long-standing employees could provide some continuity and corporate memory. Today, with luck, such questions can usually be answered by an on-site staff member for the previous three years or so, before which there is usually no-one remaining to tell the story. And if that staff member is out on break at a fly-in, fly-out operation, the knowledge is not available. If there ever was a paper report, it has usually been taken by a departing staff member or put in an archive box. If the report is electronic, its location has usually been lost, it has been transferred to an archive file or it has been accidentally deleted.

The complete records of one mine, including all plans, reports and desktop computers, were put into a sea container and sent interstate when it was taken over. The sea container was lost. One project I worked on generated many gigabytes of valuable reports and geological interpretations, which were stored on a central computer that disappeared when the mine was put on care and maintenance.

What can we do about this loss of knowledge? Will mining always be two steps forward and one step back?

One solution emerged accidentally in the 1980s when AMC Consultants began getting calls from clients who wanted to know what had happened on their mine in the past. A consultancy has to have an excellent records system, with every project assigned a job code and information stored in categories. Access is based on confidentiality provisions. We were able to provide all AMC reports and much material that had originally been provided by the client. Today, AMC has a massive computer storage system, and all documents are stored

Until the digital era, mining companies operated internal libraries that stored and indexed technical reports and

memos so that they were accessible to all technical staff. When I was given a technical assignment, the first port of call was the records office to check on the history of the topic by keyword. For example, the subject of ‘drill steel breakage’ would lead me to 50 years of reports, analysis and suggestions. If the subject was obscure, friendly staff members in the records office pointed me in the right direction.

This system began to break down in Australia during the austerity era of the early 1980s, when a new generation of managers saw the records and library system as an unnecessary cost. Computers were the new knowledge centre. I spent a lot of time reorganising my files into the KWIC indexing system on a card-operated mainframe computer, and the records department was shut down.

At Zinc Corporation, the records went into a drill core shed, and they went into

an old stope at South Broken Hill. At CSA mine, records went into a big subsidence hole, while at Kambalda they were burnt. At Mount Isa, they went into archive storage, but were largely forgotten.

Coincidentally, Russia and other countries of the former Soviet Union experienced a similar loss of knowledge with the breakdown of the Soviet systems in the 1980s. Formerly excellent systems of record keeping were discontinued, although the data was not destroyed but rather stored in archives on mine sites, local libraries or government departments. However, the connection with potential users was lost. A mining industry with a long and distinguished history now struggles to plan the future without key geology and logging information. The old paper records are often available, but because they are not in a format that can be easily digitised or the logs are not in a form that can be used in a formal logging system, they are not used.

Of course, I would rather research a subject today using the internet than use the old paper indexes. But we have lost

Corporate memoryThe modernisation of mining operations has meant that much information from the pre-digital era has been lost. How can companies ensure that important knowledge is passed from one generation to the next?

Peter McCarthy HonFAusIMM, Chairman Emeritus and Principal Mining Consultant, AMC Consultants



electronically. We also have, in safe storage, rooms full of box files that pre-date the current system for which we pay monthly storage fees. We regularly help clients with lost information and also with converting their old paper data into useable digital formats. This is not a simple data processing task, but needs to be done by experienced geologists and engineers.

Of course, this is not the whole solution. Consultancies have to keep track of information to remain in business. Exploration projects and mines can operate with a level of corporate amnesia. Even well-intentioned managers are caught out by changes in software and hardware systems, changes in project codes and failure of staff to follow procedures. Some managers see little value in past learnings, preferring to create their own crises and then be seen to manage them.

The large mining companies manage information well already. They have corporate intranets and systems of coding and storing reports that probably surpass the systems of the pre-digital era. But many mines and projects are not owned by major mining companies and their technical records remain vulnerable.

Accounting systems are audited regularly, for good reason. There is a need for similar audits of technical record keeping to ensure that such records are coded, accessible and identifiable and that operations are conducted in accordance with previously agreed procedures. Too often, incident investigations reveal failures of compliance due to ignorance rather than ill intent.

If you are managing an exploration project, development project or mine, think about how you can improve storage and access to technical information. Will someone doing your job in five years be aware of what you know? Will a future incident investigation reveal that some risks were known but forgotten? Will the geological models of the mine be preserved across generations so that our grandchildren can plan a redevelopment

in a different economic climate?Be aware that if the focus is just on

storage then, like manual backups, it won’t get done. If the focus is on dynamic management, which focuses on enhancing daily production activities, thus providing an incentive for the user at the same time as intrinsically promoting good storage, then it will get done.

The orphaned knowledge already stored in archives in countries such as Russia is a valuable resource to be exploited by project owners and technical staff alike. Converting it to digital form offers potentially rich rewards by making it available to geologists, geotechnical engineers and mining engineers for use in estimating Mineral Resources and Ore Reserves and in mine planning.

If you need help with any of this, consider using a consultant.

A consultancy has to have an excellent records system, with every project assigned a job code and information stored in categories.



person telling everyone what is expected. Organic organisations take into consideration the ideas of the employees, thereby fostering teamwork among employees instead of competition and powerlessness. The use of an organic structure provides strong incentive to participate and perform. In hierarchical structures, performance is often repressed by the superior/subordinate relationship. The narrow scope typical of work allocation in a hierarchical organisation often restricts individual impact on value creation.

While organic systems are not hierarchical, they remain stratified. Positions are differentiated according to expertise. The lead in joint decisions is frequently taken by seniors, but is always taken by whoever is most informed and capable. Authority is settled by consensus.

The requirement for commitment to the firm is far greater in organic than in mechanistic systems. Commitment is expected to be totally professional to the work. A consequence of this is that distinguishing between an ‘informal’ and ‘formal’ organisation is difficult.

Control is exercised by the development of shared beliefs about the values and goals of the company, rather than the command structure of a hierarchy. The growth of a shared culture and professional ethics take the place of structures and rules.

Case study of an organic management structure in a mining consultancy – GPPH & AssociatesCompany organisation is a continuum between organic and mechanistic structures. No company perfectly conforms to either extreme. GPPH & Associates is a small consultancy that leans strongly towards an organic

The purpose of any consultancy is to provide a superior service for its client. Organisational structure is a key element in

providing this service and differentiating between consultants.

In an organic organisation, the emphasis is on effectiveness, problem solving, responsiveness, flexibility, adaptability, creativity and innovation. Such an organisation is able to respond in a timely manner to change because employees are empowered to be creative, experiment and suggest new ideas. The process of innovation is triggered by employees throughout the organisation in a collaborative manner.

Problem solving becomes a core competence of the consultancy. A multi-disciplined approach arrives at superior solutions that are rigorous, holistic, achievable and often novel. It allows the mining consultancy to extract the most from a very talented and experienced team.

This article highlights the advantages of an organic structure for a mining consultancy and how to implement such a structure. It draws on examples of innovative problem solving taken from feasibility and strategic studies carried out in Australia and Africa.

Organisation structuresThe selection of an organisation structure for a mining consultancy is closely related to the strategy adopted. A generic marketing strategy may be implemented as a filter to narrow down a firm’s marketing strategy. This strategy looks at focusing on one of the following: branding, innovation, distribution or price (Cravens, Merrilees and Walker, 2000). Firms that follow a branding focus are likely to use a hierarchical or mechanistic structure due to the level of control and

uniformity that this affords. Similarly, a low-price focus comes from the efficiency afforded by the centralised control and standardisation of a mechanistic organisational structure. Sole traders and partnerships may also achieve a low-price focus due to the low overheads possible in a simple organisation. Where distribution is the primary strategic marketing focus, a matrix organisation structure is likely to be the most successful (McDonnell, n/d).

But where strategic differentiation of the consultancy is based on innovation, an organic organisational structure is most suited. The distributed decision-making, shared power, team building and horizontal communications make the organisation highly adaptive and foster innovation.

Burns and Stalker (1961) defined organisation structures as being either mechanistic or organic based on a study of Scottish firms in the late 1950s. They argued that companies facing a dynamic and uncertain environment may have to develop or maintain an organic organisational structure. Companies operating in a stable environment may benefit from developing or maintaining a mechanistic organisational structure. Organic structures process and distribute information and knowledge faster within the organisation. This results in an increased ability to respond or react to change, thereby leading to rapid innovation.

Mechanistic structures act as an effective and efficient organisational structure for companies operating in a more stable and certain environment. An organic organisation takes into consideration the higher-order needs and capabilities of its employees as individuals, leading to group leadership and superior teamwork. Leadership is shared by several people, rather than one

Organic management structure – its advantages in a mining consultancyAn alternative organisational structure that is flexible and meets the needs of the dynamic and cyclical nature of the mining industry

G Pitkin MAusIMM(CP), Principal Consultant and D Sorley MAusIMM, Principal Consultant, GPPH & Associates



management structure. The company has nine employees and a large number of associates, and the company mission is strongly oriented towards exceeding client expectations through innovation and professionalism. The company goals focus on individual professional development as part of a team.

Teams are the basis of all work, which includes both professional services and support tasks. Each team has a leader or manager, plus one or more additional members. The make-up of all teams within the company has changed over time to allow for the development of employees. Teams may be expanded or additional teams formed on an ad-hoc basis to meet specific requirements. Support tasks undertaken by separate teams include administration, management, training and HR, marketing, computing and safety.

All professional service jobs have a job manager and a job director. Most jobs have at least one additional team member. There is an effort made to include a broad input into every job due to the diversity of views that this brings. The job manager carries out traditional project management and control functions as well as providing leadership and a focus for facilitating communication. The job director is commonly a more experienced professional who acts as a mentor to the job manager and team members. Quality assurance is also ensured by the job director.

Features and advantagesIn an organic management structure, there is an emphasis on effectiveness, problem solving, responsiveness, flexibility, adaptability, creativity and innovation. All jobs are approached on a first principles basis, with problems being solved based on the evidence and data

collected. This contrasts starkly with the alternative approach of fitting each job within an established methodology. While having a standardised approach can simplify job execution and provide consistency, it often does not adequately address the principal problems. A flexible, team-based approach commonly produces innovative solutions that address the root cause of the principal problems. New or modified tools are developed to provide solutions to problems.

Consulting is a knowledge-based industry, and the cyclical nature of mining markets, combined with the rapid pace of modern technological change, mean that consultants must be able to adapt. An organic management structure allows a rapid response to change. Employees are empowered to be creative, experiment and suggest new ideas. This allows the development of new products and processes and entry into new markets. The company does not stagnate and fall victim to changing times.

Knowledge transfer and personnel development are features of the organisation. The ability to work on a range of projects and activities with various responsibilities provides numerous development opportunities for all levels of consulting personnel. Relatively inexperienced personnel are exposed to different aspects of the job or activity due to a lack of the need to ‘fit into pigeon holes’. Job manager roles are assigned based on ability and personal development opportunities, while more senior personnel commonly report to a more junior manager.

Collaboration, consultation and convincing are used for communication rather than control, feedback and instruction. The organisational structure minimises hierarchical and positional power. It removes the ‘tradesman/apprentice’ structure and makes it easier to challenge assumptions. No value is assigned based on the originator’s position in the organisation, but rather on the merits of the case presented.

An organic management structure allows a rapid response to change.



To leverage the potential for innovation within the team, a suitably wide range of skills and experience is essential. The recruitment strategy of an organic consultancy must be aligned with this goal. Personnel with different but complementary skill sets must be actively sought.

Also of importance is the right ‘fit’ with the organisation. During recruitment, soft skills must be assessed, in addition to more technical skill sets. Personnel who are chosen must be able to operate in an environment that relies heavily on communication and collaboration.

Different points of view are the foundation for developing successful solutions to problems. Differences are celebrated in organically structured organisations. Valuing people for the unique skills that they bring to the team is essential in promoting effective communication. This cultural difference gives people freedom and confidence to ‘wonder out loud’ in a supportive environment. This assists in identifying root issues and process interactions and develops a wide range of possible solutions to assess.

A successful organic consultancy will

strive to create an extremely flat organisational structure. Deep hierarchies must be eliminated. Due to the job-based team approach, personnel will change roles depending upon the job. As such, job titles associated with hierarchies are not relevant as they can often hinder the process of developing an organic structure.

The career progression of people who work within an organic structure is based on capability, competence, teamwork, leadership and expertise. It is important to note that career progression in this context is not upwards through an extensive hierarchy, driven by standing out as an individual. In an organic structure, career progression is largely driven by acceptance of your input by your peers. Career progression involves taking on more responsibility within the team environment. This can relate to managing or directing jobs or taking on responsibilities for assisting the development of colleagues.

Organic consultancies place great importance on effective communication skills. Training and encouraging personal development in these areas directly impacts the performance of the team. The interactive nature of problem solving

DisadvantagesSome of the strengths of an organic organisational structure also highlight its weaknesses. Much emphasis is placed on communication and normative affirmation of core values. This requires frequent informal discussions between team members. The lack of structure does lead to some time inefficiency, and care must be taken to ensure effective time management. There is also an increased requirement for training in communication and other ‘soft skills’.

For those employees more used to a hierarchy, an organic structure presents particular difficulties. It is easy to regress to old habits. Continual diligence is required to ensure that lines of communication are left open. Allowance must also be made for differing personalities and communication styles.

The lack of clearly defined procedures can also be a disadvantage when performing jobs requiring little originality or innovation. This influences the nature of jobs sought by the consultancy. ‘Body hire’ types of work are not well-suited to an organic organisation.

Core ring structureAs company size increases, an organic structure becomes unwieldy without additional superimposed structures. GPPH & Associates utilises a core ring structure to extend the enterprise scale. Figure 1 (Wood et al, 1998) shows a typical core ring organisational structure. The current inner core of nine employees is supplemented by an outer ring of associated companies, retirees, specialists and subcontractors. This outsourced expertise allows a rapid response to market and customer requirements, allowing teams of 20 consultants to be fielded for larger jobs. Specialisations can be added to augment existing team capabilities and to allow competition with much larger consulting companies. In the changing marketplace, this structure is very efficient and allows rapid adaptation to market requirements.

ImplementationImplementation requires an understanding of expected outcomes. This must be embraced by the whole organisation. Change will only be successful if the whole team is committed to the new organisational structure; it cannot be successfully implemented by a decree from the top.

Figure 1. Core ring structure.

Flexible ring

High independence and low teamwork

interaction

Entry-level staffing as employment

screen

Minimal training requirements

Lower levels of direct customer

contact

Supportive processes

Highly specialised task skills

Routine and predictable tasks

Core workforce

Primary processes

Cutting-edge technology



ausimm publicationminERal REsouRcE anD

oRE REsERVE EstimationtHE ausimm GuiDE to GooD pRacticE

sEconD EDition | monoGRapH 30

The highly anticipated second edition of Mineral Resource and Ore Reserve Estimation – The AusIMM Guide to Good Practice

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relies totally on the ability of team members to communicate effectively.

Developing the emotional intelligence of team members within an organic structure also magnifies the benefits of collaboration. Robust debate is often required to achieve high-value solutions; however, the personnel involved will have very different levels of expertise on the subject matter. Team members with high levels of interpersonal skills are invaluable in guiding these discussions and ensuring that all team members have the opportunity to contribute. The success of the team is dependent on sound decision-making based on the relative merit of the argument, not the position of the proponent.

An organic structure requires team members to do more than simply turn up and get on with the technical aspects of the job. Being an active collaborator and team member is essential to extracting the maximum benefit of the organic structure. Value lies in sharing ideas and critical, constructive debate.

Building an effective team requires strategies that create opportunities for the team members to interact. This allows the members to develop the relationships that will enhance the team’s effectiveness at identifying and resolving issues.

Case studies

Drayton SouthThe Drayton South feasibility study was conducted by a large team of ten employees and six associates, led by a principal consultant. The project is located in an extremely environmentally sensitive area in the Hunter Valley, Australia. Significant constraints were also imposed by the strategy adopted by the client.

The recommended solution for the project involved innovative mining methods, which significantly reduced mining costs. An example of this was developing a method of mining based on combined dragline, bulldozer, excavator and trucks, which achieved levels of productivity similar to a conventional dragline operation. Operating costs were much lower than traditional truck and excavator methods. Also crucial to the recommended solution was the incorporation of environmental impacts into the mine design process. This was required to mitigate external stakeholder concerns.

This process led to a series of innovative methods and software developments that allowed ‘on the fly’ assessment of visual impacts of the mine design. This dramatically reduced the time taken to understand visual impacts compared to the traditional method of third parties conducting visual assessments independently of the mine planning process.

DartbrookThe Dartbrook options and prefeasibility studies were conducted by a large team of seven employees and seven associates, led by a principal consultant.

The deposit has a very complex stratigraphy. A variety of sampling methodologies were adopted during the history of exploration of the deposit. A novel approach to coal quality interpretation was required to maximise use of the accumulated data. Standard approaches of coal quality interpretation were ineffective and rejected too much data, which could not be re-sampled because of subsequent underground mining. The team of coal quality geologists, mining engineers, metallurgists, a technical marketing specialist and a software engineer devised a method for determining likely coal products, specifications, yields and variability. This method allowed the highest-value product strategy to be developed.

The proximity of the Dartbrook deposit to Muswellbrook and Aberdeen in the Hunter Valley led to severe environmental constraints on the mine plan. Standard mining methods were shown to have too high a dust impact. A novel mine design was developed, which dramatically reduced environmental impacts. Environmental consultants considered that this plan met all regulatory approval requirements. It also produced a first quartile cost structure.

ConclusionThe dynamic and cyclical nature of commodity prices creates significant pressures for the consulting industry to develop suitable and flexible strategies in order to succeed. An organic organisational structure has long been associated with success under these conditions. Mining consultancies that adopt an organic structure are more nimble and more able to offer specialised services to help identify high-value

strategies and solutions.The collaborative nature of an organic

structure allows information and ideas to be rapidly disseminated throughout the consultancy. The widest pool of potential solutions is able to be identified as a result of all team members’ input. The talent and experience of all team members is able to be brought to bear on the problem due to the flattening of the management structure. Novel and innovative solutions are generated by cross-functional teams.

Personnel within such consultancies are offered broad experiences and the opportunity to put forward their ideas without being restricted by defined positions within a large hierarchy.

While an organic structure is ideally suited to a small consultancy, a larger organisation can be accommodated using a core ring structure.

References Burns T and Stalker G, 1961. The Management of Innovation (Tavistock: London).

Cravens D, Merrilees B and Walker R, 2000. Strategic Marketing Management for the Pacific Region (McGraw-Hill: Sydney).

McDonnell S, n/d. Consulting firm organizational structure [online]. Available from: yourbusiness.azcentral.com/consulting-firm-organizational-structure-27072.html

Wood J, Wallace J, Zeffane R, Schermerhorn J, Hunt J and Osborn R, 1998. Organisational Behaviour: An Asia-Pacific Perspective (John Wiley & Sons Australia: Brisbane).

Being an active collaborator and team member is essential to extracting the maximum benefit of the organic structure.



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industry, geological setting and selected mineral deposit types, followed by papers on the geology and exploration of individual prospective areas and mineral deposits.

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In situations where levels of risk fluctuate, imperceptibly increase over time or exert their effect over a long time frame, the risk

management approach can become clouded. As a result, the decisions and actions required by those involved may or may not adequately deal with the hazard. In a regulatory environment where risk is to be managed to ‘as low as reasonably practicable’, it is necessary for those making decisions about risk control to be given guidance as to what actions are required. Hopkins (2010) describes this approach as creating rule-based guidance for front line employees when they are confronted with complex risk management scenarios.

The concept of taking robust indicators of a hazard, increasing levels of risk associated with that hazard and creating rule-based guidance lies at the heart of trigger action response plans (TARPs). The Australian mining industry currently uses TARPs as a means of providing guidance on the management of primary hazards (Queensland Government, 2004) such as fall of ground, inrush or spontaneous combustion. Their effective application, as described by Cliff (2009), relies on a number of key criteria:■■ TARPs must be simple and robust■■ TARPs must be adequately resourced,

both in terms of personnel and equipment ■■ the focus of TARPs should be on

prevention and control through early detection■■ setting triggers requires detailed

knowledge of what is ‘normal’ ■■ TARPs need to be regularly reviewed

and revised as necessity and experience dictates ■■ TARPs should be based on high-quality

mine environment monitoring■■ TARPs should be set based on the best

available advice, both on-site and off-site

■■ if a TARP mandates an action, that action must be carried out.

A TARP typically consists of three or four levels related to indicators of the level of risk posed by the hazard in question. Techniques for measuring the indicator should be reliable, and the trigger levels must be easily obtained, in a short timeframe, to enable prompt action. It is not feasible to wait for days to obtain a measurement. Hence, to be effective, TARPs rely on early detection.■■ Level 1 of a TARP is ‘normal’, where

current procedures and practices maintain the risk at a level that is currently acceptable to the operation. However, this does not prevent any efforts to further reduce the level of risk.■■ Level 2 of a TARP is an ‘alert/

investigate’ level, where the risk level indicator has deviated from normal. The level of the deviation is such as to cause increased investigation of the reason(s) for the change and an increased vigilance or control efforts. Actions at Level 2 are likely to contain the mobilisation of additional resources, increased monitoring and the deployment of additional controls to prevent increasing risk.■■ Level 3 is a ‘high alert/rectify’ level,

where the indicator has reached a level at which the focus shifts from investigating the cause to managing the preparations for withdrawal. However, this does not mean that all efforts at control are abandoned. Indeed, more extreme control measures may be pursued.■■ Level 4 is the ‘withdrawal/removal’ of

personnel from an environment that poses an unacceptable risk.

Each level requires actions for various participants. The participants and actions are determined through company risk management processes and are specific to the operation.

Application to diesel particulate exposuresDiesel exhaust exposures in mining have been of concern for over two decades. More recent epidemiological evidence (IARC, 2012) has indicated an increasing risk of adverse health effects from chronic exposure. A conventional occupational hygiene approach has been utilised by mining companies consisting of the identification of similar exposure groups (SEG), personal exposure monitoring within the SEG to submicron carbon particles averaged over a work shift (NIOSH, 2003) followed by comparison to exposure standards or guidelines to establish the level of risk. Controls to these submicron carbon particles are developed and implemented. Exposure to these contaminants is evaluated further to determine the subsequent residual risk. This approach is robust and provides statistically reliable estimates of group exposure. One downside is the time taken to obtain exposure results and the effectiveness of subsequent efforts to address controls in the event of individual results exceeding exposure standards. This is particularly difficult in many mining scenarios, where the configuration of the working environment and conditions can change daily or even hourly.

Regulators have been increasingly attentive to situations of potential overexposure to contaminants. This attention has resulted in laws requiring investigation of individual exposures exceeding exposure standards (United States Federal Register, 2005). While this approach provides additional legislative focus on air quality, it is inherently retrospective in its application of examining instances of overexposure after they have occurred.

The advent of direct reading

Trigger action response plans for diesel exhaust exposuresAn approach to risk management that allows for the changing conditions of underground mining operations

P G Knott, Occupational Hygienist; C Evans, Project Director; F Velge, Managing Director; and J Jeffery, Implementation Manager, Pinssar Pty Ltd


Feature - Industry Focus

instruments that are capable of measuring diesel particulate comparable to established methods (Noll and Janisko, 2013) or surrogate measures of diesel particulate (Kimbal et al, 2012; Stephenson, Spear and Lutte, 2006) now permit time-resolved analysis of exposure throughout a work shift and near real-time indications of airborne concentrations. This technology opens up the possibility of creating rule-based guidance to proactively mitigate risks from diesel particulate exposure. Currently, these instruments are typically deployed in an ad hoc manner for specific investigative projects as an adjunct to standard gas and ventilation measurements during surveys or as a result of complaints (ie reactive investigative purposes). The incorporation of such technology into a useful proactive tool for managing risk within shift (as is the case with portable gas monitors) is hampered by a lack of guidance as to what levels represent increasing risk.

As an example, respiratory protection is relatively easy to implement. Employees exposed to diesel particulate should wear respiratory protection. Some jurisdictions (New Brunswick, 1996) and many corporate guidelines require respiratory protection at 50 per cent of the exposure standard. In practice, it is difficult to consistently identify locations or situations that meet the 50 per cent criteria, apart from reliance on SEG-based full-shift exposure monitoring data. With only full-shift group data, what rule-based guidance could one provide?

Trigger levelsIn relation to the levels of increasing risk, there is little in the way of specific written guidance on the taking of such measurements and their relationship to legislated exposure standards. It is essentially a risk-based decision. However, general guidance on the extent of excursions above an exposure standard is made in the SafeWork Australia guidance note on exposure standards (SafeWork, 2013):

Excursions above the 8-hour TWA Exposure Standard

During periods of continuous daily exposure to an airborne contaminant, the 8-hour TWA exposure standard permits short term excursions above the exposure standard provided they are compensated for by extended periods of exposure below the standard during the working day.

In practice, the actual concentration of an airborne contaminant arising from a particular process may fluctuate significantly with time. Even where the TWA exposure standard is not exceeded, excursions over the 8-hour TWA exposure standard should be controlled. A process is not considered to be under reasonable control if short term exposures exceed three times the TWA exposure standard for more than a total of 30 minutes per eight-hour

working day, or if a single short term value exceeds five times the 8-hour TWA exposure standard.

In this respect, Level 4 TARP values should be a maximum of five times the TWA Exposure Standard time weighted value (ie 500 μg/m3 elemental carbon (EC)), despite there being no additional guidance from SafeWork Australia on the time base to be applied. This same philosophy is embodied in the guidance notes for threshold limit values (ACGIH, 2014) as well as regulatory instruments in other jurisdictions (Ontario Regulation, 1990; Quebec Regulation, 2014). McGarry et al (2013) has applied this principle to exposures to particles from nanotechnology processing operations. A parameter termed ‘Local Background Particle Concentration’ is used to describe particle concentrations during no processing operations. Levels during processing operations are compared to excursion guidance criteria to provide indications when emission or exposure controls are needed.

Determining ‘normal’ in relation to diesel particulate matter requires an appreciation of the variability of concentration throughout the operation. This is best conducted by taking multiple continuous measurements during normal

Trigger action response plans for diesel exhaust exposuresAn approach to risk management that allows for the changing conditions of underground mining operations

P G Knott, Occupational Hygienist; C Evans, Project Director; F Velge, Managing Director; and J Jeffery, Implementation Manager, Pinssar Pty Ltd

A TARP typically consists of three or four levels related to indicators of the level of risk posed by the hazard in question.


Industry Focus

operations throughout the operation and analysing the results to obtain an understanding of their distribution. Implicit in this analysis is the knowledge that as a continuous distribution, ‘normal’ levels will contain a small percentage of high concentration periods.

Initial trials of this concept have utilised a number of direct reading instruments positioned in various locations throughout operating mines. This process has involved selecting locations to represent a range of environments where people are engaged in work and includes stoping levels, development headings and workshops. Instruments are operated continuously for at least four weeks to collect a rich dataset covering different shifts, mining locations and equipment utilisation. All data is combined to create a whole of mine data set, although theoretically it is possible to create ‘normal’ levels for each location or similar locations.

The data obtained from this exercise is anticipated to be lognormally distributed (nonparametric) and may contain zero values. As such, the statistical approach to determining an upper limit of ‘normal’ concentrations requires an appreciation of these characteristics. We have used ProUCL, ‘Statistical Software for Environmental Applications for Data Sets with and without Nondetect Observations’, version 5.0.00 (from the United States Environmental Protection Agency) for these analyses. Originally developed for contaminated site testing, the program can calculate stable estimates of population parameters and decision-making statistics such as upper confidence limit of the mean, upper tolerance limit and upper prediction limit from a wide range of data variability, distribution, skewness and sample size.

Intermediate levels may be initially set following an examination of the distribution of ‘normal’ levels using a variety of statistical measures; alternatively, the three times TWA Exposure Standard guidance value may be used. There is some biological support for establishing an increasing risk trigger at 300 μg/m3 EC. In a review of published controlled human exposure studies to diesel exhaust, Ghio et al (2012) conclude ‘in healthy subjects, controlled human acute exposure to diesel exhaust incites lung and systemic inflammation with a threshold concentration approximating 300 μg/m3.’

ConclusionThe implementation of a TARP is the start of a constantly reviewed process, where new knowledge from experience and scientific endeavor is added to refine decisions and rules. It provides a vehicle to deliver practical guidance to those people who are most affected and who have the power to alter their day-to-day exposure. In its initial stages, a TARP may not comprehensively cover all eventualities, but it provides a base from which to start.

AcknowledgementsThe authors would like to thank the management and staff from the various trial locations for their permission to install and test the concepts outlined in this paper.

A version of this paper was originally presented at The Australian Mine Ventilation Conference 2015 in Sydney.

International Agency for Research on Cancer (IARC), 2012. IARC: Diesel engine exhaust carcinogenic, World Health Organisation, press release 213.

Kimbal K C, Pahler L, Larson R and Vanderslice J, 2012. Monitoring diesel particulate matter and calculating diesel particulate densities using Grimm model 1.109 real-time aerosol monitors in underground mines, Journal of Occupational and Environmental Hygiene, 9(6):353-361.

McGarry P D, Morawska L, Knibbs L D and Morris H, 2013. Excursion guidance criteria to guide control of peak emission and exposure to airborne engineered particles, Journal of Occupational and Environmental Hygiene, 10(11):640-651.

National Institute of Occupational Safety and Health (NIOSH), 2003. NIOSH Method 5040 Diesel particulate matter (as elemental carbon), Centers for Disease Control and Prevention, fourth edition.

New Brunswick, 1996. Underground Mines Regulation NBReg 96-105 [online]. Available from: www.canlii.org/en/nb/laws/regu/nb-reg-96-105/86409/nb-reg-96-105.html

Noll J D and Janisko S, 2013. Evaluation of a wearable monitor for measuring real-time diesel particulate matter concentrations in several underground mines, Journal of Occupational and Environmental Hygiene, 10(12):716-722.

Ontario Regulation, 1990. Control of exposure to biological or chemical agents, RRO 1990, Reg 833 [online]. Available from: www.canlii.org/en/on/laws/regu/rro-1990-reg-833/102971/rro-1990-reg-833.html

Quebec Regulation, 2014. Regulation respecting occupational health and safety, CQLR c S-2.1, r 13 [online]. Available from: www.canlii.org/en/qc/laws/regu/cqlr-c-s-2.1-r-13/111316/cqlr-c-s-2.1-r-13.html

Queensland Government, 2004. Department of Natural Resources and Mines, Inspections - Coal Mining Safety and Health Act 1999, Recognised Standard – 06.

SafeWork Australia, 2013. Guidance on the interpretation of workplace exposure standards for airborne contaminants [online], April. Available from: www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/771/Guidance-interpretation-workplace-exposure-standards.pdf.

Stephenson D J, Spear T M and Lutte M G, 2006. Comparison of sampling methods to measure exposure to diesel particulate matter in an underground metal mine, Mining Engineering, 58(8):39-45.

United States Federal Register, 2005. 30 CFR § 57.5071 Exposure monitoring.

The implementation of a TARP is the start of a constantly reviewed process, where new knowledge from experience and scientific endeavor is added to refine decisions and rules.

ReferencesAmerican Conference of Governmental Industrial Hygienists (ACGIH), 2014. TLV® chemical substances introduction [online]. Available from: www.acgih.org/products/tlvintro.htm

Cliff D, 2009. Trigger action response plans (TARPs) in underground coal mines - tips, tricks and pitfalls, presented to Queensland Mining Industry Health and Safety Conference, Townsville, 23-26 August.

Ghio A J, Sobus J R, Pleil J D and Madden M C, 2012. Controlled human exposures to diesel exhaust, Swiss Medical Weekly, 142:w13597.

Hopkins A, 2010. Risk management and rule compliance decision making in hazardous industries, working paper 72, Australian National University, Canberra.




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Kestrel mine extensionRedpath Australia utilised a unique mining method for the Australian underground coal industry at the Kestrel mine extension project in the Bowen Basin, Central Queensland.

The project involved completing two separate drifts from the surface for access to the German Creek coal seam located approximately 230 m below the existing surface. The scope of work was the construction of two drifts – the first 1577 m at one in six gradient and the second 1874 m at one in eight gradient.

It was established that to deliver the

requirements of the scope, a method allowing concurrent drift excavation and fitout was required. The basic construction principle carried forward was to provide a completed drift cross-section within 30 m of the advancing drift excavation heading. This would ensure that no delays would be experienced in subsequent work activities once the drifts were completed.

The final drift construction methodology concluded to proceed with the major excavation equipment comprising a S200MA roadheader, combined with an integrated ground

support system. It was further concluded that to achieve the desired outcome, systems that minimise delays to the face advance needed to be developed. The systems identified as integral to the success of the chosen method included:■■ a machine capable of excavation and

support to eliminate place changing at the face■■ a continuous material handling system■■ a method of extending the ventilation

with minimal disruption to the works■■ a pavement and services installation

method that would work concurrently with the face advance.

Challenging the norm – innovate to differentiateAn outline of the innovative solutions that were implemented during the successful execution of the Kestrel mine extension and Grosvenor coal mine projects

G Ramage, Chief Operating Officer, Redpath Australia Pty Ltd



Assembled earth pressure balance tunnel boring machine ready for launch at the CV drift.

Each drift was developed by a Mitsui S200 roadheader with modifications to allow for a continuous tunnelling/mining cycle operation. A shotcrete boom was fitted to the left-hand side of the machine, with the operator’s console located at ground level. Another operator’s console was elevated on the right-hand side of the machine to allow operation of the drilling boom, which was mounted on a slide rail to allow flexibility of positioning depending on the stage of the cycle.

In support of the roadheader activities, an integrated conveyor system mounted on a sliding floor arrangement will be able to advance as the mining face progresses. This sliding floor consists of four 1.5 × 6 m sections that utilise hydraulic rams to ‘walk’ inbye, allowing room for the installation of precast concrete floor panels for final floor completion. The system allowed for boot end moves to be undertaken during the fibrecrete and bolting works of the cycle while no excavation works are carried out on the face.

This method borrows from the tunnelling and construction industries to eliminate place-change delays in the mining cycle by enabling complete ground support installation without retreat of the primary development machine from the face. The aim was to reduce the project duration with the completion of final floor and services to within 30 m of the operating face as it advances.

The last aspect of the equipment system was the ventilation duct extension and installation arrangements, which are fixed to the sliding floor. The system provides for the installation of 6 m long, 1.8 m or 1.4 m diameter spiral-wound steel ducts to extend the vent system as mining progresses. A telescopic vent duct section located on the inbye end of the sliding floor provided for the ventilation extension between the installed static duct and the moving/advancing duct located on the sliding floor. Additionally, the vent duct system extended to within 3 m of the excavated face to maintain the zone boundary between NERZ and ERZ1.

It should be noted that all equipment outbye of the roadheader was compliant to the appropriate sections of the Queensland Coal Mining Safety and Health Act 1999 Recognised Standard – 04, ‘Underground non-flameproof diesel vehicles’.

Conclusion and lessons learnt at the Kestrel mine extensionThe chosen construction methodology for the drifts at the Kestrel mine extension was successful in its application and in meeting the requirements of the project. The integration of the back-end works with the mining cycle to minimise downtime to the face of the excavation assisted with increased advance rates from those previously experienced by Redpath within similar scopes of work. While the system may appear complex in its explanation, once implemented, it was repetitive and assisted with creating standardised work practices.

Subject to the ground conditions and the resultant bolt pattern, advance rates achieved averaged in the order of 24-26 m per week through stone and 18-20 m per week through coal seams. The reduction in the advance rate through the coal seams is influenced by an increase in the ground

support required (both bolting and fibrecrete) and an increase in the presence of ground water. Alternative strategies were developed for construction through the coal seams, which assisted with advance rates through subsequent seams.

The lessons learned from the implementation and construction process saw the system undergo improvements from the initial design. Some of these changes included:■■ improvements to the ventilation

ducting at the ERZ1/NERZ interface, which reduced the likelihood of the roadheader tail conveyor causing damage to the ventilation duct■■ installation of a walkway between the

precast inverts and the sliding floor to improve access■■ modifications to the transit mixer chute

to enable the 15 MPa blinding to be poured directly under the bridge conveyor■■ enhancements to the sliding floor for

hydrocarbon, first aid and tool storage.The bringing together of knowledge

from previous experiences on underground metalliferous and civil tunnelling works enabled Redpath to develop and implement an innovative and integrated system for the construction of the drifts at the Kestrel mine extension.

Grosvenor coal mine It has been stated that the majority of mining in the future will be underground. We are seeing fewer new near-surface discoveries, and existing mines are expanding their deposits into deeper areas. The excavation of shafts or declines is typically on the critical path of the

It was established that to deliver the requirements of the scope, a method allowing concurrent drift excavation and fitout was required.

Caption here

Bolting boom in operation.


Industry Focus

mining project schedule. Saving time on those activities can significantly improve the net present value of the mining project.

For the excavation of declines, tunnel boring machines (TBMs) can be used in many, if not most, cases. In almost all conditions, these provide considerably higher production rates compared to traditionally practiced excavation methods and, more importantly, offer highly safe environments and operating capacities.

In 2012, a project calling for the development of two access drifts at the Anglo American Grosvenor coal mine anticipated construction using traditional methods of excavation typical for drift development, particular to the underground coal industry. The nominated drifts were located in extremely poor-quality geology, soft soils and variable ground including minor coal seams. The project particulars nominated high quantities of rock bolts, shotcreting and concrete inverts as primary ground support for the drifts, which by necessity were substantial, thus creating elevated cycle times and slower advance rates. This caused prolonged construction periods, which in turn resulted in augmented development costs. Considering these factors, an alternative method to deliver the drifts using an earth pressure balance (EPB) TBM was proposed by Redpath Australia.

Following Anglo American’s review and

acceptance of the proposed TBM excavation method, three parties (Anglo American, the Robbins Company and Redpath Australia) worked together to bring the concept of TBM-driven drifts to operation. The result was two 7 m (finished) diameter, fully lined drifts totalling 1815 m completed over a total of eight cutting months. Subsequently, the mine operator gained early access to develop the pit bottom through the conveyor drift while the TBM was relocated to excavate the next drift. This provided schedule advancement and surety for the longwall to commence production.

The key to this innovative solution was to combine comprehensiveness with reliability, repeatability and simplicity. This was something that the proposed TBM operation set out to deliver while reducing time and delivering cost effectiveness.

Why a tunnel boring machine at Grosvenor?The success of TBM technology in establishing underground civil infrastructure and providing alternative means of rapid and safe access in poor ground conditions resulted in the consideration of a TBM at the Grosvenor coal mine to establish the conveyor, personnel and material (transport) drift access from the surface. Considering the geotechnical challenges, the TBM excavation method utilised EPB

technology, which also required simultaneously addressing ventilation, gas and cooling management elements along with other coal mining-related hazards.

A study of the conditions at the Grosvenor mine led to an 8 m diameter hybrid purpose-built soft ground (EPB type) machine, with special features being designed and manufactured to efficiently bore mixed-face conditions while installing pre-cast concrete segments as final lining. This also allowed the machine to operate safely within the coal mine regulatory environment with the presence of methane gas and build multiple decline tunnels within the same coal mine development.

The selected hybrid TBM is capable of conversion between a pressurised EPB mode and a non-pressurised, single-shield mode. Because of the requirement to swiftly build two blind drifts while maintaining full ground support, the machine was also designed for quick disassembly so that it could be removed from the first drift and relaunched on a second drift.

The back-up trailers (nine in total) were specifically incorporated to handle the concrete lining segment units, extend the muck transfer conveyor, handle dewatering pumps, install the main ventilation ducts and fix the TBM and permanent service pipes and communications.

Consideration of the supporting equipment was a fundamentally important aspect to ensure that the TBM maximised the advance rate. Tunnel boring production can be limited by the speed of muck removal and the supply of critical construction material to the TBM. The backup trailer system was as important as the machine.

The key to this innovative solution was to combine comprehensiveness with reliability, repeatability and simplicity.

Precast floor panels and sliding floor looking inbye.

Bridge conveyor and sliding floor looking outbye.



Performance evaluation – both driftsFigure 1 provides a summary of the production levels achieved over both drift developments. The conveyor drift advance rates, while poor at the beginning of the drift construction, can be accounted for through the slower productivity rate during the learning curve period, the extended wet testing and commissioning of the TBM (a disadvantage of the OFTA process), poor cutter head muck flow (incorporating soil conditioning that did not function correctly) and the catastrophic failure of the screw gearbox. However, the excavation period for the CV drift did meet the program advance rates. The cutter head interventions accounted for approximately 40 per cent of the recorded TBM downtime.

The transport drift was delivered 29 days ahead of the assigned stretch target and 42 days ahead of the baseline schedule.

Figure 2 compares the two methods for

excavating drifts. As stated previously, the initial tender request required the two drifts to be excavated using excavators and roadheader machines. Considering the geology and the associated strata support, the advance rates achievable would be lower than in more competent ground. The graph represents the actual period of excavation that the TBM delivered, including the extended periods for the retraction of the TBM from the CV drift and the modifications required.

The productivity rates for the roadheader/excavator combination are plotted on the same graph (defined in the legend box as RH). Neither the roadheader nor the TBM could commence cutting until the access to the drift face through the portal was provided. The graph starts the roadheader excavation against the completion date of the portal (August 2013). The TBM dates and excavation period are adopted from actual production records.

Overlaying the two methods shows that

the roadheader productivity is constrained by the poor soft soils for the first 250-400 m of the drifts. Assuming no breakdowns or an increase in the strata support and accounting for the slow TBM performance for the first 400 m of the CV drift, the TBM completed both drifts some 29 weeks ahead of the roadheader in the CV drift. This allowed immediate access to the coal seam to commence development.

Conclusions at Grosvenor An obvious barrier to early adoption is the capital cost to purchase a TBM, which can be undoubtedly higher than a drill and blast or roadheader operation. However, through technology and innovation advancements, the opportunity to implement alternative excavation methods in the mining industry is becoming a reality. If a robust and well-managed feasibility review of alternative excavation methods is conducted, it is possible to pursue the various opportunities of mining through poor ground conditions and subsequently deliver economical solutions for resource development that may otherwise be unviable. Several factors should be considered before implementing any alternative excavation method:■■ Is the method compliant with local

legislation and standards?■■ Does the method of excavation

improve safety?■■ What productivity can be achieved?■■ Are the necessary skills available

in the locality to implement the excavation method?■■ Can a workforce be trained in the

required skills to implement the alternative excavation method?

When consideration is given to the matters raised in this article, the economics of the solution must be tested. If the economic hurdles are met, a decision can then be made as to whether the implementation of an alternative excavation method will deliver an increase in value to undertake the development of the resource.

The bringing together of knowledge from previous experiences on underground metalliferous and civil tunnelling works enabled the development and implementation of alternative excavation systems to construct the Grosvenor drifts.

This article is based on a presentation given at the 2016 New Leaders’ Conference in Brisbane.

Figure 1. Grosvenor drift excavation performance and comparison.

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Excavation MM Drift Complete

Excavation CV Drift Complete

Screw Failure Cutter Change

Figure 2. Drift excavation method comparison (tunnel boring machine vs roadheader).

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1 31 6113 43 737 37 6719 49 79 9725 55 85 1034 34 6416 46 76 9410 40 7022 52 82 10028 58 88 10691 109

TBM COMPARISON WITH ROAD HEADER

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Completion of CV drift with TBM - access for in-seam development 42 weeks earlier than road header

Completion of M&M drift as planned

First access for in-seam development if road

header used at CV drift

CV portal complete ready for

road header

Scheduled completion of CV draft using road

header - 29 weeks later than TBM

CV Drift Cumulative TBM MetresMM Drift Cumulative TBM Metres

Planned CV Drift Cumulative RH Metres

Larger reassembly gap for modification & upgrade to TBM


Industry Focus

As the mining industry becomes increasingly lean, a ‘one size fits all’ approach is becoming increasingly

obsolete. A commitment to continuous improvement – finding ways to do things better, faster and more cost effectively – is how asset owners and contractors are ensuring their ongoing success.

In drill and blast, developments in detonation systems have provided forward thinkers with an opportunity to dramatically enhance their blast capability. Highly tailored blasting solutions, with the potential for significant cost and productivity benefits, are now being implemented by many teams and contractors who have been willing to invest in increasing their knowledge base, trialling new electronic initiation technologies and upskilling.

An introduction to electronic systems in the Australian mining industryPrior to the 1990s, pyrotechnic detonators, also known as electric and non-electric detonators, were the most commonly used in the Australian mining industry.

In the late 1990s, electronic initiation systems were introduced through a variety of explosive suppliers. Initial uptake was slow, but as the technology evolved and advanced to address the recognised practical limitations and to meet the specific needs of the end user, uptake progressively increased.

In these early years, the largest consumers of electronic detonators were underground and open pit coal mines. These projects could realise an immediate benefit to their operation because pyrotechnic detonators did not offer a solution to the problems associated with these types of projects, such as excessive ground vibration.

Today, through increased industry

understanding, testing and delivery of tangible results demonstrating the benefits of using electronic detonators (covered in detail later in this article), they are now widely used across different commodities in both open pit and underground operations.

However, despite electronic systems’ proven benefits and advantages over conventional products in many blasting situations, a step-change is still required within some blast teams to overcome concerns, fully understand the technology and utilise it to its full potential to offer best-for-project solutions.

Addressing the barriers to uptakeDespite their advantages, the higher cost associated with electronic systems compared to conventional systems, along with the additional training required, still acts as a deterrent for many companies as there is not an immediately recognisable direct cost saving to the operational budget for drill and blast.

Further, it is well known that the majority of the cost benefits of using electronic systems are generally realised downstream via mining productivity and crushing throughput that are optimised through a continuous improvement program or series of site-specific trials, which also come at an additional cost to the project.

For many companies, the cost of changing to electronic technology is determined to outweigh the reward, which is not overly surprising in light of the current market conditions and the pressure to deliver immediate cost reductions.

Determining best-for-projectAn electronic initiation system is not just about the detonator. While it is an integral part, all three elements of the system – the detonator, the blast planning software and the detonator programming hardware –

provide the technology with its unique advantages.

Typically, electronic systems are best suited to:■■ projects in close proximity to

vibration-sensitive infrastructure, such as houses, bridges, tunnels, rail lines and optic fibre telecommunication, where greater and more precise control over the blast is needed■■ large tonnage blasting where

electronics can deliver cost efficiencies by reducing delay scatter, which will improve fragmentation and ultimately reduce the amount of bulk explosives required■■ projects where creating the muck pile

profile to suit the digging fleet is the primary objective; for example, cast blasting using draglines and dozer push■■ complex blasts that have a requirement

for multiple decks; for example, coal mining through seam blasting.

Productivity benefits of electronic systemsAs discussed previously, most of the concerns around electronics can be overcome by investing in short-term training for long-term gain, smart technology selection and a change in mindset. It is essential to embrace innovation where it can be seen to deliver value.

The numerous benefits of electronics are discussed as follows.

Reduced bulk product use This is electronics’ key advantage. The overarching goal for drill and blast is to use the raw energy from the bulk product to do the most useful work on the rock.

In most mines, the bulk product cost is more than all other drill and blast costs combined. Electronic initiating systems, when used to their potential, will achieve more with the rock using the same energy. Depending on the mine’s situation, this

Detonators – best-for-project practices in drill and blastDevelopments in detonation systems have the potential to improve blast capability and productivity

Michael Wiseman, Technical Services and Stephen Timbrell, Blasting Specialist, Action Drill & Blast



can deliver increased productivity or reduce costs by blasting the rock better so that it digs faster and the mine produces more for the same cost. Alternatively, if the mine is operating at full capacity, capacity can be maintained at reduced cost by doing the same work with less bulk product because the energy is being used more efficiently.

Cheaper at longer lengthsIn a pyrotechnic detonator, the head of the detonator is relatively cheap and the tailwire is relatively expensive. In electronics, the head is very expensive due to its computer chips, but the tailwire is cheap as it is just wire. This means that short lengths of pyrotechnics are cheaper per detonator but at long lengths, usually greater than 50 m, electronics are cheaper.

Improved fragmentation Most of the gains achieved with electronics are not made through the detonator itself but through the use of its advanced software. In just a matter of hours, a blast team has the ability to plan timing sequences that would otherwise take days using conventional equipment and be impossible to practically implement.

Even when using the exact same timing sequence across both systems, electronics deliver an advantage as the detonator is accurate to the timing it communicates (±1 ms), compared to the unavoidable natural variability (±5 to 25 ms, called

‘scatter’) in pyrotechnic initiation systems. This often results in smaller or bigger time gaps between detonations than expected or holes may even detonate in the wrong order.

However, the major benefit of the accuracy and flexibility of electronic timing capability is the ability to devise a plan that best suits the shot in question. Very fast, very slow and/or very complex sequences can be used to get the most useful work out of the explosives to achieve optimal fragmentation. Trying these sequences without electronics would be unsafe, impractical or impossible.

Reduced ground vibration The best electronic initiating systems come with a vibration prediction tool so that vibration can be predicted at various points, particularly sensitive ones. This is called ‘time of arrival analysis’. The blast timing can then be modified to protect those points, and the vibrations can be aimed in a direction where nothing of value needs protecting.

Furthermore, because of the accuracy of the timing, the explosive energy is released at the exact time it was set to, meaning that there are no unplanned spikes in energy (and therefore vibrations).

Improved control of blast movement As previously mentioned, electronic systems’ advanced timing make it possible to speed up and slow down certain parts of the shot to change the muck pile profile. A basic rule is that a hole that detonates a long time after the hole next to it will tend to move into the gap where the last hole was. It is possible to change the height of the pile and where the pile sits by changing the timing between the holes.

Integrated safety and security features Pyrotechnic detonators have a very advanced and shielded fuse, but they can still be set off by anyone with the appropriate tools. Similarly, an electric system can be set off by stray electrical currents such as radios, lightening or mobile phones.

Developments in detonation systems have provided forward thinkers with an opportunity to dramatically enhance their blast capability.

Typical coal overburden blast.


Industry Focus

While each electronic system differs between suppliers, the firing box typically communicates with each detonator in the circuit via the internal microchip to check for continuity by using enough power to test the circuit but not enough to initiate the detonator. Any faults in the circuit are reported to the firing box. Once the firing box is armed and ready to fire, full power is delivered to the detonators to enable initiation. Additionally, because electronic detonators have a built in microchip, they have a unique serial number that can be tracked if required.

Reduced detonator stock requirements Pyrotechnic detonators are a fuse, so the timing delay on the box is based on a very small fuse in the detonator. This means that a different detonator is needed for each timing. If different lengths of

detonator are needed for each timing, a dozen or more different detonator piles might be needed, but only a couple of types will be used for each blast. With electronics, the timing is programmed in, so only different lengths are required. With less than half the combinations needed, twice the quantity of each length can be used in the same magazine.

Technology on the market todayThere are a number of different companies marketing products today, and everyone in the industry has their preference.

There are ‘single chip’ systems, where the same chip/capacitor that is used for testing is used for firing. This makes the product cheaper but also more pedantic when programming the detonators and more fragile as only so much energy can be

sent during testing and programming. Other products are more expensive but

have arguably more robust dual chip/capacitor systems, where one chip is used for programming the blast and the other is used for firing it.

A smarter and more powerful programming chip enables more to be done automatically and robustly. There is no concern over sending too much energy to the chip and setting it off as the firing chip is only unlocked at firing time.

There is currently only one product available that has vibration modelling and muck pile shaping in its software. It is possible to instruct it to shift and lift in certain directions and protect areas. It can send the timing to the detonators and provide information on what impact that has vibration-wise on the sensitive points.

The timing programs for the other products are more manual and if they have vibration modelling, it’s generally only available at extra cost or by hiring the vendor’s technical team.

Best-for-project is keySelecting technology based on what is best-for-project must be front of mind for any drill and blast team.

If the project is basic, using advanced electronic systems won’t realise any productivity or cost benefits when conventional products will perform what’s required.

On the flip side, an unwillingness to adopt electronic technology because of the perceived extra costs or training required – when the likelihood that the cost efficiencies gained in other areas of the project would outweigh the upfront capital expenditure – would be an unfavourable approach in any economy, and even more so in the current climate.

Selecting technology based on what is best-for-project must be front of mind for any drill and blast team.

Tying in a blasthole.



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Audio and video recordings capturing the highlights of AusIMM conferences and professional development activities are now

available for purchase.

Being able to download audio and video recordings gives you the flexibility to gain new skills at any time that suits you and

your organisation.

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Audio and video recordings capturing the highlights of AusIMM conferences and professional development activities are now

available for purchase.

Being able to download audio and video recordings gives you the flexibility to gain new skills at any time that suits you and

your organisation.

I have to thank the members of the Institute most cordially for the honour conferred upon me in selecting me President, which

position my poor services have prevented my filling adequately. I have, therefore, only been able to stumble through my year of office under the guiding direction of our esteemed Secretary. I fully appreciate the honour done to me; and, now that it is over, I can look back with pride and pleasure at having occupied the chair; but I am told that it remains for me to fill one of the requirements of our Institute and present you with what has been dignified by the name of a presidential address.

My relief in complying with this is in the knowledge of its freedom from the usual discussion which appertains to papers presented by our worthy members. It has

been usual in the past for the subject chosen to be specially connected with the work immediately engaging the attention of your President, and on this occasion I would like to break away from this time-honoured custom and engage your attention for a brief space on what is equally dear to us all – namely, ideals of the profession. In doing so, the retort of Whistler to an art student gives me, I must admit, much misgiving, for, on being asked how he developed his artistic talents, replied that he painted what he saw, which produced the immediate reply, ‘Ah, but the tragedy will come when you see what you paint.’ Let me hope that my word-painting will not expose me to the predicted possible future terror of the art student.

The basis of professional idealism is

expressed in the fact that one human being is always more or less answerable for the good or evil affecting his fellow human beings. Each unit is dependent upon its companion unit, but it needs a most sympathetic intelligence and profound insight to see how all the units are really linked together by silken cords of cause and effect, cords which slowly but surely weave them into communities which, according to their merits, rise or fall.

In the attainment of any ideal the far-reaching influence of our student life, experience, and study cannot be over-estimated. It is perfectly true that future work and environment will develop such sterling qualities as may be imparted or possessed by earlier study and work, but, nevertheless, without the intention of doing our work to the very best of our ability, without dependence on reward or further satisfaction than its successful achievement, all must count for nothing. It is an interesting fact that scientific training and education has not maintained the integrity of the profession above that established by men endowed with great natural abilities and small education; indeed, there is an indicated tendency for the scientifically trained engineer to exhibit a restlessness and discontent that his abilities are not more quickly recompensed – the outcome, no doubt, of a training more academic than practical – hence, with the great advancement in the higher training of our engineers, and the large number that are yearly placed at our service, it is yet difficult to find a sufficiency of men in whom absolute reliability can be placed, or who can inspire the necessary confidence to satisfy, not only a board of directors and the general public, but, what is, still more important, the officials and

Charles F Courtney, AusIMM President 1908

Professional idealismThe following Presidential Address is taken from the Proceedings of the AusIMM, 1909. It was originally delivered at the First Ordinary Meeting in Melbourne in 1908.

Heritage

Mine at Kalgoorlie. Photo by WE Fretwell. Used under CC BY 2.0.


workmen whom they may have to control. This disability would quickly disappear

if our students could be more rationally trained. They at present will readily submit to an ordinary scholastic examination, but will hesitate to accept the responsibility of deciding a practical point on which probably the lives of many may depend. Our late and beloved Professor Kernot, whose loss we all deplore, has in his always admirable manner drawn our attention to the truth ‘that average engineering problems require about one part of mathematics to six parts of judgment, experience, and knowledge of human nature. A man may be an admirable mathematician and yet a failure as an engineer from a want of comprehension of the very large non-mathematical part of his work.’ And further, he remarks, with great truth, that ‘mathematics as taught by those who are theoretical mathematicians, and unacquainted with actual engineering practice, always seem to travel away from actually occurring problems; mere academic questions are laboured ad nauseam whilst the everyday requirements of the practical man are ignored or obscured.’

This, of course, results in a vast amount of unlearning what has probably taken some months or years to acquire, with

disheartening effect, and oftentimes mental demoralisation, rendering it extremely hard to believe the simple truth that painstaking and common sense count for far more in a man and his usefulness than a whole dose of science. But the study and cultivation of these attributes enable the most difficult engineering problem to be satisfactorily overcome by the man possessing these two valuable abilities.

Our scientific and technical education does not, and to a certain extent cannot, impart administrative knowledge; it is, therefore, almost entirely ignored, and yet this is part of the essential equipment of our modern engineer – the very imperfection of our training is, therefore, against the maintenance of high ideals, to attain which a vast amount of drudgery must be gone through. The man, therefore, who can withstand the depression of becoming acquainted with the small details on which the larger work is entirely dependent, has always, and always will have, though possibly quite

unconsciously, the power of executing the highest efficient work, because, whatever he does will be of practical utility, and its influence sufficient to absorb those with whom he may be engaged or who may be under his immediate direction.

This self-training leads to very considerable power of concentration, and from this results the impelling force that imparts continued life, energy, and desire of achievement by the other component parts of the human mechanism employed in the creation and development of our life’s work. The laws of strength, executive capacity, and that pleasure in great or small schemes which is roused less by a desire for gain than a strongly felt necessity for action resulting in success, preserves professional idealism, and the ethical bulwarks which the wisdom and piety of our ancestors have built up, and prevents insurgent ideas in those naturally of unstable character, that would otherwise overthrow self-respect and mental integrity.

Persistent and well-directed purpose, with absolute purity of intention, will sooner or later receive its desired reward.

Heritage

Perth, Western Australia. Photo by WE Fretwell. Used under CC BY 2.0.


expects a favourable report that will assist him to sell, or float the property; should, therefore, it be otherwise than favourable there is generally a distinct possibility of non-payment, and it is the exposure to these risks that oftentimes endangers the honesty of purpose and integrity of the engineer. We have even heard of reports being amended before payment is made; there is a subtlety in this that is surrounded with peril, which only full payment of the fee in advance overcomes. An engineer should always remember that he has not only a duty to himself to perform, but he must also consider the honour of his profession, and the right of the general public, who may be strongly influenced by his opinions.

Another great source of danger often arises in fixing large contracts, supervising construction, or in the supply of extensive stores where several firms are competing, but in this there is the general protection that the contractor is always one of worldly wisdom, and it is astonishing how quickly he reads the character of the engineer in charge of such matters. The higher standard of morality now established amongst our engineers has

I have no desire to discourage the younger members of our profession, on whom the future depends so much, but merely to suggest that their influence largely depends on the self-sacrifices that they are capable of making, for herein they will show their strength. Adequate recompense and promotion may be considered the only satisfactory return for past studies and active, intelligent energy, but we can be sure of one thing, that persistent and well-directed purpose, with absolute purity of intention, will sooner or later receive its desired reward. The true measure of a man’s worth is not to be found in a heroic impulse or fine idea, but in the steadfast working out of either through accumulating weeks or months.

The manufacturer has always a number of problems to solve, and more than often complains, even bitterly, that he cannot find men to solve them, their continued lack of solution often involving great loss. Competition has compelled close supervision and necessitated a scientific inquiry into the problems that lay ready for solution. It must be remembered that only through the industries can any new products or methods be of use to the

community generally; the acceleration of modern knowledge has been very great, but that which still remains to be discovered is prodigious in extent.

Most of the trouble in mining, as well as in other professional work, is the desire to become rich quickly, and we have observed that some men sail pretty close to the wind in this respect, and if their judgment, or, perhaps we may say cunning, is not very highly developed, they become wrecked; but whether successful or otherwise in their endeavours for personal gain there is wanting in such individuals a true sense of idealism, and generally, if not always, you will find the ability to work through intricacies and difficulties, or to face a troublesome problem, is absolutely wanting or foreign to their characters and natures.

Very great risks are often incurred in reporting on a mining property, engineering proposition, or industrial works, and for the satisfaction of both parties in entering into an engagement of this kind it is decidedly best that the fee for undertaking the work be first fixed. The average vendor who employs an engineer to report upon his property

Heritage

Esperance Station, Western Australia. Photo by WE Fretwell. Used under CC BY 2.0.


largely removed temptation in this respect, and it is a great satisfaction to know, as many of us do know, that numbers of our fellow engineers have never in their experience received or even been offered a bribe. The very marked change that has taken place during the last thirty years in this one most important detail can only be hailed with the utmost satisfaction by the profession generally, for it demonstrates better than anything else the adoption of a higher standard of work and responsibility, and a sustained effort against often very adverse circumstances and temptation to maintain a high professional idealism.

Having a care for all that concerns the inner life and character is ever demanded of us, for after all it is our justice and integrity rather than our ability which must make way for us and sustain us.

These considerations bring us to another most important item in the welfare and development of our engineers. The personal magnetism possessed by some men in their work and administration develops a condition of

hero-worship and loyalty of purpose in those working under their direction that has oftentimes far-reaching effects, particularly if strength of character with kindly consideration and justice accompany that special trait, which is so marked and noticeable in some of our best engineers, but it must fall to the lot of few of us to be so fortunate as to receive our training under such influences. A wide sympathetic understanding produces an unclouded atmosphere that keeps endeavour bright, and this is a school of engineering from which results the very best efforts and work that adorn past achievements. Association does much and will ever have its abiding influence. We must remember, therefore, that to do our best is to follow our best examples, at

whatever cost or sacrifice, with almost fanatical enthusiasm.

The great purpose of an institution such as ours is not only to impart information to one another by the reading and discussion of interesting and important papers on modern practice, but also to guard jealously the honour and integrity of the profession, that its members may feel and know they are bound together for the purpose of giving their best to the world, regardless of fame or recompense, and that their epitaph shall be merely, ‘These are men who tried to do their duty,’ remembering always that the fire of toil on earth is the output of human striving, an intricate interweaving of vital forces which, like some titanic machine, wrings out in pain a vast destiny.

It is our justice and integrity rather than our ability which must make way for us and sustain us.

Heritage


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monoGRapHs, spEctRums & conFEREncE VolumEs

Applied Mining Geology brings together aspects from field geology, mine geology and mineral resource estimation

in a practical guide that could easily become the new handbook for mining geologists of the future.

Dr Marat Abzalov is probably known by many readers, having published a number of papers with co-authors in the AusIMM’s Mineral Resource and Ore Reserve Estimation (Monograph 30), the Transactions of the Institutions of Mining and Metallurgy and the Journal of the Southern African Institute of Mining and Metallurgy.

This book provides a detailed overview of the operational principles of mining geology, presented as an approachable mix of theory and practice. It is a book for practicing geoscientists and engineers as well as current students who are preparing to work in these areas. The outcomes of case studies from operating mines and projects provide useful benchmarking or comparisons for more advanced practitioners. The computer scripts attached as electronic supplementary material to the online version make this a useful resource for learning and personal application.

The publication is organised in seven parts, covering various aspects of mining geology and its application to enable decision-making on mines.

Part one covers about 25 per cent of the book and provides background and discussion on the best practice of mining geology with reference to mine design, mine mapping and sampling. It provides clear, logical instructions to cover basic procedures in mine geology, and more detail is provided on limitations, common mistakes and troubleshooting.

Part two covers the various sources of sampling errors and how these are remedied. Practical examples in parts one and two illustrate the theories and best

practices, such as those comparing the results of dry bulk density measurements by total number of samples assayed and from twinned holes in different orebodies. The online version contains electronic supplementary material in the form of files with exercises (and solutions) referred to from chapter nine onwards.

Part three deals with mineral resources and the work required to ensure that data can be used confidently. The accessibility of the material to a wide audience is demonstrated by chapter 16, which introduces readers to various estimation methods and touches on their applicability.

Part four encompasses 20 per cent of the book and helps to demystify the complex field of applied mining geostatistics. Chapters introduce the reader to the commonly applied geostatistical methods for modelling and estimation of deposits. For example, chapter 18 on variography provides sufficient detail for people new to the subject to understand and be able to apply it in their modelling procedures. From a forward-looking perspective, chapter 22 provides an in-depth discussion on localised uniform conditioning, which allows estimation of recoverable resources for a block (grade tonnage curves) and provides waste and ore distribution within a block. The author describes its application in iron ore and bauxite mines and recommends applying it to early-stage exploration as well.

Part five helps the reader to understand the estimation of uncertainty, while part six covers classification and the challenge faced by many practitioners of balancing quantity and quality of samples. The practicality of this book is well illustrated in chapter 28, which provides a good example of the interaction of many variables that may be used in classification related to mine production.

Finally, part seven covers a number of

mineral deposit types, including lode gold deposits, uranium deposits (in situ leach), iron oxide deposits, bauxite and mineral sands. They are good, quick guides for practitioners that are new to these deposit styles and help them to understand mine geology issues particular to a specific deposit style and how to address them.

Figures in colour and black and white provide a good visual balance, with theory being explained by clear diagrams and colour photographs used to show actual examples from mines and projects.

The writing style is concise and easy to read, and although some syntax errors have made it to the final publication, they do not detract from the ease of understanding sometimes complex theoretical approaches. The technical areas are well explained, and the formulae are broken down to help the reader understand the influence of changes in variables based on the geology.

The book does not provide a strong indication of the interdependence of disciplines in mining to ensure quality in planning, scheduling and execution, monitoring, and reconciliation as I had expected. However, it does provide geologists with a good understanding to analyse the impact of decisions in drill spacing, mining unit size, uncertainty in geology and sampling, and many other variables, and to demonstrate this to the broader mining disciplines. I would recommend it as a handbook to aspiring and current mining geology professionals.

Applied Mining Geology is available in both ebook and hardcover formats from www.springer.com.

Reviewed by Pamela Naidoo-Ameglio MAusIMM, AusIMM Director and Principal Technology Business Partner, BHP Billiton

Applied Mining Geologyby Marat Abzalov

Book Reviews


John Laurence (Jack) Liebelt was born in Broken Hill on 7 November 1922, where he was educated at the local Marist

Brothers College. After completing his secondary education, he became an underground miner, like his father before him, and worked at the North Broken Hill mine. In 1947, he joined the staff of the Zinc Corporation in Broken Hill, where he embarked on an outstandingly successful career with the CRA group, leading to his appointment as an Executive Director of CRA in February 1979.

Jack successfully attained his qualification in mining engineering and moved steadily through increasing levels of responsibility at the Zinc Corporation, becoming General Manager of Operations of the Zinc Corporation and New Broken Hill Consolidated (ZC/NBHC) in 1964. During this period, he was also President of the Broken Hill Mining Managers Association.

In 1971, Jack moved to the Melbourne head office where he was appointed General Manager of ZC/NBHC lead/zinc operations. In 1972, Australian Mining

and Smelting Limited (AM&S) was incorporated, with Jack being appointed as its General Manager. He was elevated to Managing Director of AM&S in 1976, a position he held until his appointment to the CRA Board in February 1979.

Jack’s appointment to the CRA Board came with increased responsibilities. He was Chairman of Mary Kathleen Uranium, Kembla Coal and Coke, Blair Athol Coal, Pacific Coal and Minenco. Later, he was Chairman of Snowy Mountains Engineering Corporation from 1984-1987 and a Director of Aberfoyle Limited from 1985-1994.

Jack’s contribution to the mineral resources industry and Australian community extended well beyond what he accomplished as a member of the leadership team of CRA. He actively participated in the affairs of the AusIMM throughout his career, and was active beyond his retirement as a company executive. He was a Councillor of the AusIMM, Vice President from 1976-1979 and President in 1983. He was Chairman of the Executive Committee of the Council of the Institute from 1985-1994.

In recognition of his contribution to the Institute and the mining industry, Jack was awarded AusIMM Honorary Fellowship in 1990. In 1992, at the request of the Council, he generously undertook a major review of the Institute’s structure and organisation, providing recommendations for changes in structure and governance to prepare the Institute for the changing environment in which it would be operating. In 1994, he

received the Beryl Jacka Award ‘in recognition of his dedicated and sustained service to the Institute…[having] served on a number of committees during his 26 years as a Councillor, and having been active and held office in the Broken Hill Branch for many years.’

A further indication of his contribution to the resources industry was the fact that he had also been a Director of the Australian Mines and Metals Association, and was admitted as a Fellow of both the Institution of Engineers and the Institution of Mining and Metallurgy, London.

Jack’s interest and contribution to the mining and metals industry is evident from the brief details of his career chronicled above. But Jack was also very interested in people, particularly in young professionals and their development. He took time out to encourage the young people who worked under his leadership, with a focus on the benefits of self-development.

Despite his personal success, Jack was a genuinely humble person. He was respectful of others and had a highly developed sense of fairness. He had a lively sense of humour and it was always good to be in his company. He was a person of the utmost integrity and totally reliable. I knew Jack for over 60 years and was closely associated with him for many of those years in Broken Hill and Melbourne. I always had great admiration for him; his standards, his qualities, his loyalty and his honesty in his approach to both his seniors and juniors. There was much to admire about him.

Jack Liebelt is one of a select group of individuals who have made a very significant contribution to an industry that, in turn, has contributed greatly to the economic development of this nation. He was a well-rounded individual with many admirable qualities and was a good friend who could be relied upon to do the right thing. He achieved much in many ways during a long life.

Jack was supported greatly throughout his career by his wife, Shirley. He is survived by his son, Peter, and daughter, Anne.

Jack Liebelt is one of a select group of individuals who have made a very significant contribution to the industry.

John Laurence Liebelt 1922-2015John Ralph AC FAusIMM

Obituaries

DECEMBER 2016 BULLETIN MAGAZINE 95www.minesafe.ausimm.com.au

WHO SHOULD ATTEND■ From top management to all personnel associated with the

Resources Industry■ Directors, management and supervisors■ Operators, health and safety practitioners ■ Regulatory, research and academic personnel■ Health professionals and carers associated with the Resources

Industry■ Health and safety suppliers, manufacturers and developers■ Resource industry professionals and students, and personnel

with a passion for and embrace health and safety

WHY SHOULD YOU ATTEND■ Connect and network with others from the Resources Industry■ Keep up-to-date with the latest health and safety key issues■ Hear from inspiring keynote speakers■ Collaborate with industry professionals■ Maximise networking and learning opportunities

1 – 2 May 2017 | Perth, Australia

Within the resources industry (minerals, oil and gas), health and safety is paramount.

Minesafe International 2017 will bring together

leading thinkers to address past, current and future

issues, challenges, changes, procedures and

methods of management relevant to health and

safety in the Resources Industry.

SPONSORSHIP AND EXHIBITION OPPORTUNITIESShowcase your organisation at Minesafe International 2017 by signing up as a sponsor or exhibitor today. Sponsorship packages vary to suit all budgets and marketing aims. To discuss the opportunities, please contact event management.

EVENT MANAGEMENT | The AusIMM Rachel Magill, Senior Coordinator, Events Telephone: +61 3 9658 6128 | Email: [email protected]

KEYNOTE SPEAKERSJoanne FarrellGroup Executive Health, Safety, and Environment (HSE) and Managing Director Australia Rio Tinto

Professor Malcolm SimDirector, Monash Centre for Occupational & Environmental Health (MonCOEH) Monash University

Gerard Forlin QCBarristerCornerstone Barristers

Hosted By

In conjunction with

Principal Sponsor Dinner Sponsor

A Meridian Bioscience® Company

REGISTRATION NOW OPEN

AusIMMGround Floor 204 Lygon Street Carlton, Victoria 3053 Australia

PO Box 660 Carlton South, Victoria 3053. Australia

Facsimile: +61 3 9662 3662

AusIMM BoardPresident: Rex Berthelsen FAusIMM(CP)

Immediate Past President: Geoff Sharrock FAusIMM(CP)

Alexandra (Alex) Atkins FAusIMM(CP)

Dave Clark FAusIMM(CP)

Diana Drinkwater MAusIMM

Janine Herzig FAusIMM(CP)

Steven de Kruijff MAusIMM

Colin Moorhead FAusIMM

Pamela Naidoo-Ameglio MAusIMM

Dale Sims FAusIMM(CP)

Contact an AusIMM Board member: [email protected]

AusIMM Services Acting Chief Executive;Director, Events and HRMiriam Way MAusIMM [email protected]

Director, Member and Corporate ServicesBrad Clements [email protected]

Director, Strategy and CommunicationsJenni Stiffe [email protected]

Member enquiries:Contact: 1800 657 985 | +61 3 9658 6100 [email protected] www.ausimm.com/membership

Chartered Professional enquiries: [email protected]

Member discounts: www.ausimm.com/discounts

Free member resources: www.ausimm.com/free

Communications: Media enquiries: [email protected]

Conferences and Events: Contact: [email protected]

Conference schedule: www.ausimm.com/conferences

Events calendar: www.ausimm.com/calendar

Policy: Contact: [email protected]

Policy priorities: www.ausimm.com/policy

Publishing: Contact: [email protected]

AusIMM Communities of Interest:Branches: Find your nearest Branch: www.ausimm.com/branch

Societies and Committees: www.ausimm.com/group

Student Chapters: www.ausimm.com/students

International Correspondents: www.ausimm.com/internationalrep

Bulletin magazine: www.ausimmbulletin.com

Article suggestion or query: [email protected]

Advertising query: [email protected]

AusIMM shop: www.ausimm.com/shop

Social media:Facebook: www.facebook.com/ausimm

LinkedIn: search ‘AusIMM’ in groups

Twitter: www.twitter.com/theausimm

YouTube: www.youtube.com/theausimm

AusIMM ContactsThe Australasian Institute of Mining and MetallurgyFounded 1893. Incorporated by Royal Charter 1955

Noor Crookshanks and Steve Tavani at the 13th AusIMM Mill Operators’ Conference.


DECEMBER 2016 BULLETIN MAGAZINE 3www.undergroundoperators.ausimm.com.au

Sponsorship and Exhibition Opportunities Participating as a sponsor or exhibitor at the Underground Operators’Conference can take you straight to your target market and demonstrateyour level of support and commitment to the underground mining industry.

The sponsorship and exhibition package contains a variety of levels. Shouldyou wish to discuss opportunities, develop a package to suit your budget,or have any questions, please contact Event Management.

Event Management: The AusIMMFor further information, please contact: Eliza Sanneman, Team Leader, Senior Coordinator, Events Telephone: +61 3 9658 6105 | Email: [email protected]

Platinum Sponsors

Gold Sponsors

Silver Sponsor Dinner Sponsor

Celebrating40 years

13th AusIMM UndergroundOperators’ Conference 2017

16-18 October 2017, Gold Coast, Australia

Lena Abrahamsson, Professor,Luleå University of Technology

Mark Adams MAusIMM,Kaama Consulting

Gideon Chitombo MAusIMM,The University of Queensland

Dale Elphinstone,Elphinstone Group

Joe Luxford FAusIMM(CP),Trident Project & Mining Services

Professor Michael Quinlan,UNSW Australia

Paul Rouse MAusIMM,PYBAR Mining Services Pty Ltd

Capturing theOpportunities:

Communication,Collaboration,

Innovation

Keynote Speakers

Underground Operators' 2017 Ad-H+_X 31/10/2016 11:55 am Page 1

4 BULLETIN MAGAZINE OCTOBER 2016

UNLOCK YOUR MINE’S POTENTIAL

orica.com

Introducing the Vistis™ Bulk System; a range of industry leading, high energy, bulk emulsion explosives.

In hard rock metal mining operations the Vistis™ Bulk System has delivered reduced milling costs by optimising fragmentation, dig rates and increasing mill throughput.

High energy levels can also unlock cost savings by expanding drill patterns without impacting blast results.

Using our experience and world’s best practice technology, Orica is committed to working with you to explore the significant financial benefits the Vistis™ Bulk System can deliver to your mine.

View the case study video online orica.com/vistis

UNLOCK YOUR MINE’S POTENTIAL

orica.com

Introducing the Vistis™ Bulk System; a range of industry leading, high energy, bulk emulsion explosives.

In hard rock metal mining operations the Vistis™ Bulk System has delivered reduced milling costs by optimising fragmentation, dig rates and increasing mill throughput.

High energy levels can also unlock cost savings by expanding drill patterns without impacting blast results.

Using our experience and world’s best practice technology, Orica is committed to working with you to explore the significant financial benefits the Vistis™ Bulk System can deliver to your mine.

View the case study video online orica.com/vistis

04 AusImm OCT16-I-Back-1.indd 4 7/10/2016 8:20 pm

The AusIMM - OZ Minerals

Documents

Transcript of The AusIMM - OZ Minerals